Wednesday, 2 June 2021

NEW FOREX RULES : PRICES SHOOT UP

The prices of goods pegged in United States dollars have shot up as businesses comply with the controversial Statutory Instrument 127 of 2021 which mandates them to use the Reserve Bank of Zimbabwe (RBZ)’s auction exchange rate.

The local currency is officially at ZWL$84 against the greenback while in the parallel market it is pegged at ZWL$100 or more against the USD.

According to the SI 127, gazetted last week, businesses that refuse payment at the ruling exchange rate will be fined a fixed penalty of the amount of ZWL$50, 000 or an amount equivalent to the value of the foreign currency charged for the goods or services in question (whichever is the greater amount).

Despite the central bank having given businesses a grace period of two weeks to comply, some traders have since effected price increases in USD.

A snap survey by CITE in the city centre Tuesday morning showed that some supermarkets and furniture shops had increased prices in the USD although not displaying them.

Prices are now quoted in the local currency only in some shops with customers told the exchange rate upon asking.

At one furniture shop, a CITE reporter was told that a television stand going for ZWL$19 500 was also selling at US$232 using the exchange rate of US$1: ZWL$84.

Before SI 127, one would only pay US$195 or even less for the same product. “It’s unfortunate that we have to now use the government’s exchange rate,” said a shop attendant.

At one supermarket, an attendant also said they were left with no choice but to comply with the law, adding they were still giving some discount to those who buy using foreign currency.

However, some supermarkets such as Greens and Tilus were still using the parallel market exchange rate which pegs the USD at ZWL$115.

Meanwhile, industry leaders are expected to meet the government this week in Harare to deliberate on concerns arising from the new exchange rate regulations. Cite.org.zw

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