The Reserve Bank of Zimbabwe (RBZ) said Monday it has agreed with the Bakers Association of Zimbabwe on some measures to stabilize the price of bread that has risen sharply over the past few months.
The measures include allowing members of the Bakers Association to access their full requirements of foreign exchange through the weekly foreign exchange auctions for the importation of inputs and procurement of fuel for the distribution of bread across the country.
“In view of the positive engagement with the Bakers Association, it is expected that members of the Bakers Association will review the price of bread downwards,” RBZ governor John Mangudya said in a statement.
He said the price of bread will be adjusted on account of economic fundamentals that include global price trends of inputs and the movement of the foreign currency exchange rate.
The official exchange rate is now pegged at 1 U.S. dollar to 338.2921 Zimbabwe dollars (ZWL), against parallel market rates of above 500 ZWL against the U.S. dollar.
Zimbabwe has seen a wave of price increases for basic commodities over the past few months amid rising inflation due to internal and external factors.
A standard loaf of bread was costing 341 ZWL in April this year and this has since shot up to 600 ZWL.
The Russia-Ukraine conflict has also caused supply bottlenecks, as Zimbabwe imports 65 percent of its wheat requirements from Ukraine, according to Tafadzwa Musarara, chairman of the Grain Millers Association of Zimbabwe.
Earlier this month, the government said that the country had four months’ supply of wheat in its stocks, with millers expected to import 9,000 tonnes of wheat per month to meet the country’s monthly requirement of 30,000 tonnes.
Last month, the government lowered tariffs on the importation of basic commodities to curb soaring prices.