Mangudya drops fuel bombshell

THE Reserve Bank of Zimbabwe will today cancel fuel subsidies, with oil companies now required to compete for foreign currency on the interbank market, a move likely to see the price of fuel rising sharply.

Central bank governor John Mangudya yesterday said the bank was dropping the 1:1 peg from the fuel importation matrix, which many fear will trigger another round of price rises and a domino effect in an economy already experiencing high inflation.

This comes after the central bank said it had secured a US$500 million loan from unspecified international banks to support its interbank currency market to ease shortages of hard currency.

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