Harare – In a statement on Sunday The Reserve Bank of Zimbabwe (RBZ) said it has started drawing down foreign currency from the US$500 million lines of credit advised in the Monetary Policy Statement issued by the Bank last week.

The purpose of the facilities is to fund the procurement of essential commodities including fuel, electricity, wheat and raw materials for the manufacturing of cooking oil, packaging and other basic commodities.

Dr John Mangudya said the bank is working tireless to address the fuel shortage currently obtaining in the country.

 “The Bank released US$41 million for the procurement of fuel on Friday, the 5th of October, 2018 and the fuel is currently being supplied and delivered to the various filling stations and supply points across the market.

“The Bank is grateful to the National Oil Company of Zimbabwe for working round the clock to ensure that the fuel is delivered to the oil marketing companies across the country.

 “In view of these positive developments, the Bank would like to assure the public that there is sufficient fuel available in the country and therefore there is no need for panic-buying of fuel and other essential commodities.”

Dr Mangudya also said the Bank has noted, with great concern, that increase of prices of certain goods has followed the spike in foreign currency parallel market rates which is being caused by some people bent on cheating members of the public of their hard earned income.

“The opportunists are manipulating foreign currency parallel market rates to cause unnecessary panic and despondency and destabilisation of the economy. Such counterproductive behaviour is unwarranted and should be condemned by all peace loving Zimbabweans.

“The Bank would also like to reassure the public that the multi-currency system will remain in use and the Bank shall continue to secure lines of credit to supplement the country’s foreign currency earnings, mainly from exports and diaspora remittances, in order to support the entire economy.”

Meanwhile, over the past week prices of basic commodities sky rocketed with a mere 2 litre bottle of cooking oil fetching $12 in most retail shops not to mention other basic commodities with some disappearing from the shelves.

Nevertheless shortages are there but being exaggerated by hoarding and speculation.

Currently this spiralling has been influenced by chasing USD rates following the Government deliberate push of the USD out of the Zimbabwean economy.

Government technically de-dollarised the economy by reintroducing local currency bank accounts, which will be traded in electronic transfers and bond notes only.

Fact is a devalued currency is good when the economy is producing and able to meet export demand.

In Zimbabwe, depreciation will not be helpful because the country is not exporting and it will worsen the situation.

Zimbabwe will be hit by cost push inflation, imported inflation and structural inflation.

Economists agree that it's not only money that push up price alone. There is much to it than the concept of demand pull.

The Government of Zimbabwe is not understanding the situation. They are focusing on quantitative easing while ignoring other inflationary pressures.

Corrective measures should be put in place by the responsible authorities unless the country will go back to the calamities of 2008.

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