Zimbabwe lifts import ban on basic commodities

26/10/2018,

On 23 October, the Government lifted a ban on the imports of basic commodities, including food products, which had been in place since 2016. The measure aims to boost dwindling market supplies and stabilize generally higher commodity prices, mainly driven by a foreign currency deficiency. The Government adopted the use of foreign currencies, mainly the US dollar, in 2009 after a period of hyper-inflation. Local bond notes, officially traded at parity to the US dollar, were subsequently issued in 2016 to ease currency shortages; however, in the parallel market the bond note’s value depreciated, failing to address liquidity challenges. After the Reserve Bank of Zimbabwe directed banks, on 1 October, to separate foreign currency and bond note accounts, as well as their associated electronic deposits, bond notes experienced a sharp loss of value on the parallel market, instigating panic buying of basic commodities and exerting further upward pressure on retail prices.

Country: Zimbabwe