Multiple Exchange Rates Killing Us - Retailers
The Confederation of Zimbabwe Retailers (CZR) has called on monetary authorities to resolve the problem of multiple exchange rates.
The local currency is in the form of banknotes, mobile money and swipe and this has resulted in the emergence of multiple, albeit illegal, exchange rates. The official (auction) exchange rate is $88,5 (Zimbabwe dollars in their various forms) to the US dollar.
In June 2019, the Government reintroduced the Zimbabwe dollar as the sole legal tender but then allowed United States (US) dollar transactions last March.
CZR president Denford Mutashu argued that different exchange rates have resulted in some manufacturers and suppliers resorting to turning down payments in local currency. He said:
It has come to our attention that there are four exchange rates one meets at goods and service procurement.
There is the auction exchange rate ($89: US1), Zimbabwe dollar (ZWL) Swipe to US$ ($180 to US$1), ZWL mobile money to US$ ($200: US$1), and ZWL cash to US$ ($165: US$1). We have also discovered that there is also a rate for Nostro USD.
This has created confusion on the market and extreme cases are when the supplier /manufacturer/tuck shop wholesale flatly refuses any other payment for goods and services except US dollar cash which comes with sweet discounts to entice the retailer or wholesaler.
He said the multiple exchange rates were causing confusion in the market, as formal retailers were struggling to compete with informal businesses that sell exclusively in US dollars.
He also said this was pushing more companies to demand US dollar payments and to seek hard currency on the parallel market.
