In modern economies, unstable and weak currencies have a spiral effect on the cost essentials due to the openness of the economies to externalities.
A Zambia Monitor quick survey on Copperbelt towns indicates that bakeries have increased the price of bread by K2 translating into a 10 percent hike.
A family bread which was selling around K18 is now going for K20 and the smaller sizes which sold for K14 have now moved to K16.
Bakery representatives who would not want to be quoted stated: “the cost of production has gone up due to Kwacha fall and high fuel costs among others, we would have pushed the price even by K4, but we understand the economy is very bad.”
One of the retailers in Kitwe on Saturday said sales were likely to drop as few would manage to buy bread and hoped that the depreciation of the Kwacha against major convertible currencies would be halted.
On Friday, ZANACO reported that the Kwacha against the United States Dollars closed the week K23.01/23.07 buying, and selling from K22.99/23.05 opening respectively.
ZANACO newsletter added that local unit was anticipated to trade stable, with a bias towards the weaker side as corporate demand was expected to persist.
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