Tuesday, November 29, 2022
HomeBusinessSmall USD Denominations Crisis Resurfaces

Small USD Denominations Crisis Resurfaces

The gradual re-dollarization of the economy has brought with it challenges in accessing smaller denominated United States dollar (USD) notes and coins reminiscent of the early days of 2009 dollarization, 263Chat Business has established.

This follows government’s decision in March of this year, to allow wider use of foreign currency for persons with free funds.

A market survey by this publication captured consumer concern over “forced” purchases of small treats such as sweets and pens to settle for their change in USD.

Retailers are now devising a variety of ways to settle for change in USD terms, a situation that is disenfranchising consumers of their hard earned cash.

Small USD denominations of US$0.25 and US$0.50 coins are not available on the market making it difficult to get change.

“There is a no supply of US$0.25 and US$ 0.50 coins. So if a customer buys a 2 litres of cooking oil for example at US$ 2.50 definitely I will have to offer sweets or other small treats to cover for the US$ 0.50 change,” said one shop-owner in Harare’s Central Business District.

Some motor vehicle owners who are charging commuters US$ 0.50 to get to town are having to pair commuters.

In 2015, the Reserve Bank of Zimbabwe (RBZ) had to introduce bond coins, which were to become the local currency to alleviate the problem.

ALSO ON 263Chat:  Simbisa Engages RBZ Over Innbucks Ban

But fast-forward events, the Zimbabwe dollar has been depleting in value since it was officially re-introduced last year and market actors are reluctant to accept it as change at a market rate for USD transactions.

In big retail shops, the challenge is even more pronounced as the official exchange rate currently at ZWL$ 65.8765 against the USD further complicates change as it then accommodates single digit USD cents which are difficult to access and calculate.

The shortage of US$ 1, 2 and 5 notes have also made it difficult to transact in the USD currency as a time most  goods and services are now charged in USD despite the same also chargeable in Zimbabwe dollars.

However, retailers are fixing a much higher exchange rate on local currency denominates prices making it cheaper to purchase in USD.

Despite this, authorities are however adamant that the Zimbabwe dollar remain the official medium of exchange and should settle for change.

Analysts have called for government intervention on the issue of currency use in order to bring sanity in the market at a time there has been stability on the exchange rate in the past three weeks.


Share this article

No comments

Sorry, the comment form is closed at this time.

You cannot copy content of this page