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Retailers resist note-coin exchange

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Zimbabwe’s retailers are reluctant to trade United States dollars for rand coins, and banks, which have been importing and stockpiling the money to ease low-value transactions, are in a dilemma — whether to convert the stocks back into notes to retrieve the money for business or wait for government intervention.
Consumer Council of Zimbabwe (CCZ), a local consumer watchdog, thinks the government should urgently consider statutory intervention if the crisis drags.
“We plead with the Minister of Finance, Tendai Biti to intervene. He should have outlined measures in his mid-term fiscal policy review last week,” Rosemary Siyachitema, CCZ president, said. “We are going to ask government to act on this as a matter of urgency.”
John Mushayavanhu, the Bankers Association of Zimbabwe (BAZ) president, confirmed that banks are currently sitting on huge stocks of coins imported from South Africa, which remain uncollected.
“Our retailers are reluctant to exchange US dollars for rand coins because they don’t want to trade at the ruling exchange rate.
“ They are used to an informal 1:1 rate. They think they will be incurring exchange losses.”
But Denford Mberi, the Zimbabwe Retailers Association chairman, said: “Acquisition of coins increases costs of running businesses. Ordinarily costs are recovered through higher prices and therefore ought to be discouraged.”
“Our suggestion is to exchange coins with equivalent notes at no extra charge other than the ordinary bank charges. Introducing exchange rate risk as you suggest may discourage or limit accessibility of coins.”
“Free exchange of coins with the equivalent notes when coins are available at Banks will make coins easily available for change in retail outlets. Easy availability of coins in retail outlets automatically eliminates the need to use products as change.”
Consumers described the behavior as strange and deviant, adding it raised suspicions that the retail firms did not want an end to a crisis that has benefitted them for one and half years.
A crisis of change has placed consumers at the mercy of unscrupulous retailers who only get change by chance. For the most part, they are either asked to spend small units of change on unwanted goods or get a credit note for future purchase from the same outlets, or forego the change altogether.
Rayer Murima, a Harare consumer, said the currencing commodities — the use of goods as currency — tends to promote predatory pricing, where small items are sold at above-market prices.
“Whenever supermarkets don’t have change, they ask you to buy something more. This is affecting our budgets. The way they price their goods is some kind of trap to force you to buy more,” Murima said.
“I hate to spend my money on useless items, or things I don’t really need. Worse, the small items are waywardly priced. A lollipop, for instance, costs as much as 20 cents. It’s out of this world. It’s some form of institutionalised robbery. It should stop.”
Biti also blames the current bout of inflation on said excessive consumption spending driven by the currencing of commodities.

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