Exchange rate disparities, ‘skewed forex allocations cause market distortions- Delta Beverages

Delta Beverages says Zimbabwe’s economy has registered ‘notable recovery’ in the first quarter of 2021.

However, the beverages giant notes that currency measures have ‘dented confidence’.

According to the company, exchange rate disparities and ‘skewed forex allocations to certain market players has distorted pricing creating an uneven playing field and a fertile ground for arbitrage.

Apparently, beer and drinks half year sales volumes went up for Delta, Lagers 57%, Chibuku 68%, Soft drinks 95%, Spirits & Ciders 66%.

The Reserve Bank of Zimbabwe launched the forex auction system which is reportedly dogged by distortions and allegations of abuse.

Recently, the central bank released names of people and organisations allegedly abusing the system.

The said abusers were reportedly accessing forex from the auction at cheap rate and unscrupulously channel it to the black market.

The government is blaming speculative tendencies and forex dealers for causing market distortions.

However, critics say econonic fundamentals need to be sorted first.

Zwnews