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Zimbabwe Price Commission Warns Business On Parallel Forex Dealings

Zimbabwe's National Incomes and Pricing Commission, named by President Robert Mugabe in August, has warned companies not to turn to the parallel market for the foreign exchange they need to finance imports of goods and raw materials.

Panel Chairman Godwills Masimirembwa told the state-controlled Herald newspaper the commission would let firms calculate import costs and prices using the official rate, currently Z$30,000 per U.S. dollar. It was unclear how this would help firms given the hard currency drought and a parallel market rate of Z$1 million per U.S. dollar.

President Marah Hativagone of the National Chamber of Commerce told VOA the new pronouncement would aggravate already serious shortages of food in the country.

Consumers will soon feel the impact as the few bakeries continuing to operate have rejected the panel's proposed official price for bread of Z$100,000. Chairman VIncent Mangoma of the National Bakers Association said a loaf must fetch Z$400,000.

Director Godfrey Kanyenze of the Labor and Economic Development Research institute told reporter Blessing Zulu of VOA's Studio 7 for Zimbabwe that even the central bank is turning to the parallel market to obtain foreign exchange.

More reports from VOA's Studio 7 for Zimbabwe...