The wanton raising prices of basic commodities based on the movement of the exchange rate is not a significant factor to determine the value of a product, Reserve Bank of Zimbabwe Governor Dr John Mangudya has said.

Delving on beer price hikes , he said production of beer had between 15 to 20 percent import content, and it would not make sense for the firm to increase prices with that percentage should the exchange rate move.

“You do not expect the price of beer to rise by 15 percent, 15 percent is almost negligible. In Zimbabwe you find that some people have a linear relationship with the exchange rate, when the exchange rate moves from 2,5 to 3 percent they will also increase the price. That is not proper for business in this country, even in the whole world.

“You look at the import content in the price of the product that is being produced,” said Dr Mangudya….chronicle