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The Local Currency Struggles To Carry Out Store Of Value Function

Inflation has shot through the roof in recent weeks as Zimbabwe prepares for presidential and parliamentary elections expected in August. Officially standing at more than 280% in April, analysts estimate the inflation rate to be somewhere over 700% currently. This situation has created price madness in supermarkets. 

In recent days it has been observed that retailers and wholesalers have been changing price tags on goods every morning to try to keep pace with the exchange rate. This has brought back memories of 2008, when hyperinflation was so out of control that restaurant-goers would see the price of their dinner change before they could finish eating it. The government has resorted to various expedients to stabilise the economy, including issuing gold coins and launching a gold-backed digital currency but so far to no avail.

As we are in the 2nd week of June, the Zimbabwean dollar has further lost its value by 45% from ZWL$ 2,577.0564 it was trading at, on the 30th of May 2023. The RBZ exchange rate hence was trading at ZWL$ 3 673.7718 against the US dollar, as of Tuesday this week. This free fall of the local currency has driven rapid price increases across the economy.

On Wednesday, 7th June 2023 Reserve Bank of Zimbabwe announced its first Wholesale Foreign Exchange Auction rate since 20th of February 2019 when the interbank was introduced. 9 bids were received from banks, with a total of US$11 180 000 allotted to 10 bids. The highest bid rate received was ZWL$ 5,020.0000 while the lowest bid rate allowed was ZWL$ 4,500.0000 giving a weighted average of ZWL$4,868.5152 which is the current wholesale auction rate.

The WHOLESALE AUCTION RATE is for banks buying foreign currency from the RBZ for onward sale to their clients and it is the one which determines the INTERBANK RATE, which will be the main source of foreign currency with prices being determined by the market.

Precise Management and Research Consultancy has the latest salary and benefits survey reports for the Zimbabwean Market.

What to expect :

  • Prevailing Monthly Basic Salaries, Base Salaries, and Total Packages.
  • How companies have implemented and adopted remuneration split models.
  • Tax implications on paying salaries using a blend of USD and RTGS currency.
  • Remuneration structures for blended salaries.
  • Company vehicles with regards to : (a) school fees    (b)  medical aid        (c)  motor vehicles     and more ..........                 
  •  For a quote of the comprehensive report kindly contact: Jackie Ngunda (+263 717 301 471)  or Email: info@precisemrc.co.zw