adminNgoni Dapira Business Correspondent
THE continuous fall in the South Africa Rand is causing pandemonium on the local market as cross-rates are fluctuating leading to some retailers refusing to trade in the currency.
A snap survey by Post Business revealed that the rejection of the Rand by some businesses was causing cross-rate fluctuations on the streets.
Consumers are now on the receiving end as they are being forced to play tune to the varying cross-rate demands by business operators who now prefer using the United States dollar and the once shunned Bond coins.
The Bond coins which are in denominations of 1c, 5c, 10c, 25c and 50c are set at par with US dollar coins to make them interchangeable into US dollars, which explains why they are currently stable as a preferential currency in banks, shops, supermarkets or other businesses countrywide.
Some small and large supermarkets stand accused of applying exchange rates when customers are paying with the Rand but not doing the same when giving change.
In Mutare major retail outlets like Choppies, some pharmacies and vendors are rejecting Rand coins while OK and TM supermarkets are using fluctuating cross-rates which are at $1to R12 and $1to R13 respectively as of Tuesday this week.
“I have always used R5 to buy a drink for my son each day I take him to school, but recently I have been told that a R5 coin is worth US$0.35 in a number of supermarkets,” said Mrs Irene Chipunza. She said she had resorted to buying her son’s beverage from street vendors where some were still accepting R5 at the value of US$0.50 or R6 to 50 cents.
A grocery shop owner in downtown in Mutare, Mr Tendai Marange admitted that he had instructed his workers to apply the unofficial exchange rates because the weaker Rand was cutting into his profit margins when changing to US dollars.
“Even if you go to those money changers outside, they are selling R100 at US$7 or less, so if I trade at 1 is to 1, I will soon be broke and go back to Marange, my rural home,” said Mr Marange.
Airtime vendors and newspaper vendors are also refusing to trade in Rands under strict instructions from their agents.
However, one airtime vendor who identified himself as Roy said some vendors were accepting Rands at a rate of $1 to R14.
“That is the only way I can break even just in case the cross-rate drops the next morning before I dispose of the Rands.
“All the agents from Econet, NetOne, Telecel have told us not to accept Rands,’’ said Roy.
Transport operators are also setting varying cross-rates on the Rand while some are not accepting the Rand coins citing that fuel stations were not accepting them.
“If you use a R10 note to pay for a route that costs US$0.50 you will be given R2 or R1 change, which I think is not fair,” complained one commuter at the Dangamvura bus terminus.
The motoring public has also raised concern over the way fuel service stations are refusing to accept Rands as a legal tender despite the local economy being a multi-currency system.
Motorists said they felt short-changed as the only time the South African Rand is accepted was when the exchange rate is much lower than the prevailing market value.
Africa University lecturer and economist Mr Thomas Masese said the problem is that business people are taking advantage of the ignorance of the ordinary person and imposing their own exchange rates.
‘’The Rand is of a lower value when it is in the hands of the consumer and is of a higher value when it is in the hands of the shop owner. This has been the nature of transactions in larger supermarkets and shops for the past few weeks.
‘’The absence of continuous regulation by the Reserve Bank of Zimbabwe or any other responsible authority has left the consumer with no option but to accept whatever exchange rate dictated by informal money changers and service providers. In this situation the consumer is vulnerable to people who have decided to take advantage of the fact that consumers do not question how exchange rates are applied,’’ said Mr Masese.
He added that the responsible authority, the Reserve Bank of Zimbabwe should step in and set standard rules on how exchange rates should be implemented when transactions take place.
‘’This will save the consumer from the misfortune of being overcharged for goods or services or failing to transact because the currency they intend to use has been rejected,’’ he said.
Government in 2009 adopted the multi-currency system which included the Rand, US dollar and Botswana Pula. The Pula has however slowly been scrapped out of the system.
Last year the Reserve Bank of Zimbabwe added the Chinese Yuan, Australian dollar, Indian Rupee and the Japanese Yen though very few people have been seen using the currencies since the adoption.
The US dollar has been mainly available in notes and consumers had to rely on Rand coins for change before the introduction of bond coins.
Since the beginning of the year the South African Rand has not been performing well on the market.
While banks might be using official exchange rates when conducting all their transactions, this is not the case with traders.
In his Mid-Term Fiscal Policy in July, the Minister of Finance and Economic Development, Cde Patrick Chinamasa removed from the travellers rebate grocery items as such as mealie-meal, meat, sugar and flour, which were greatly imported from South Africa and Botswana.
This has also led to less demand for the Rand by some cross-borders that used to import the products in large quantities for resale.
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