Comment: Cross-rate dealers fleecing consumers

0
372

The issue of the cross rate between the South African rand and the United States dollar has been a contentious one in Bulawayo and its environs since the dollarisation of the economy in 2009.

Whereas in Harare and other areas, including Gweru in some instances, one US dollar was regarded as equivalent to 10 rands, in Bulawayo, a different rate prevailed.

The US dollar for most business transactions was regarded as being equivalent to seven rands in Bulawayo.

This resulted in employees in Bulawayo who were getting paid in US dollars complaining they were being prejudiced.

However, this time around it is the rand that was falling against the dollar.

The rand reached a 28-month low last week.
This news should have been sweet music to the ears of the US dollar earners in Bulawayo but alas, this was not to be.

Instead, shops immediately increased prices of goods on the shelves on the grounds they were using the rand to import commodities.

Clearly this is daylight robbery because the prices that were being adjusted were those of products that were already in the shops and therefore imported at the previous currency regime.

Even locally produced goods have had their prices revised upwards and one wonders what the logic behind that is.

Ironically, when the South African rand firms against the dollar and using the same businesspeople’s logic, prices should go down, but then this does not happen.

Just yesterday morning the US dollar had gone to a 7,9 exchange rate against the rand, but the fluctuation did not see prices going down.

What has also been of concern is that shops are not following Finance minister Tendai Biti’s directive to display prevailing exchange rates on that particular day. Whoever is in charge of monitoring such developments should read the riot act to the culprits.

The directive to display exchange rates was supposed to take effect from the beginning of this month and businesspeople should just have complied instead of waiting to play cat-and-mouse with the police.

Authorities should look closely at this phenomenon of cross rates especially in Bulawayo and see how best it could be dealt with.