Forex auction pays off as Zimbabwe reduces price of bread

Zimbabwe’s foreign currency auction system, now only in its second week, has begun to pay off as the Grain Millers Association of Zimbabwe today announced that the retail price of bread is being reduced by $13 from $79 to $66 a loaf.

It said this follows an agreement with the Reserve Bank of Zimbabwe which is now allocating millers foreign currency under the auction system announced two weeks ago.

The association said the cost of flour had dropped from $3 150 to $2 136.89 for a 50 kg bag.

“Consequently, the bakers have committed to reduce the price of a standard loaf of bread from wholesale price of $70.00 and retail price of $79.00 to a wholesale price of $59 and a retail price of $66.00,” GMAZ said.

“From now on, our prices will be guided by the Foreign Currency Auction outcomes.”

Zimbabwe holds its foreign currency auction every Tuesday and the average rate applies for the remainder of the week until the next auction.

The Zimbabwe dollar averaged $57.36 at the first auction last week and went down to $63.74 at the second auction this week.

Raw materials got the highest allocation of U$7.2 million out of the US$16.3 million that was allotted.

Food and beverages got US$1.7 million.

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