USAid’s food security research arm, the Famine Early Warning Systems Network (FEWSNET), in its January food security update released this week, said the parallel market exchange rate remained volatile in January, driving most price hikes in local currency.
The parallel forex rate started the year at US$1:$200, but quickly spiked to $240 at the end of January.
“Parallel market exchange rates remained volatile, driving most price hikes in Zimbabwe dollars. Maize grain prices in Zimbabwe dollars have risen 10% since December in Harare, while bread and refined vegetable oil prices increased by around 20% nationally during the same period. Electricity tariffs have increased 12,3% in Zimbabwe dollars since January 1,” read the FEWSNET statement.
“The food poverty line and the total consumption poverty line recorded 6,8% and 6,1% increases in the month, constraining access to food on the market.”
FEWSNET said businesses continued to raise food prices to hedge against rising inflation, pushing the majority consumers earning below the poverty datum line currently pegged at $73 000 for a family of six into poverty.
In a tweet, former Finance minister Tendai Biti said the Reserve Bank of Zimbabwe’s “squeeze” on supply and availability of local currency was pushing prices to go up in US$ terms.
He said management of the economy would be a central issue in the 2023 elections.
Both local and international experts seem to agree that the country now needs to redollarise due to the perennial currency crisis.