Business Reporter
THE embattled local currency ,ZWG crises has reached a new level following a warning on inevitable company closures by a grouping of top retailers.
The Retailers Association of Zimbabwe which includes OK,TM Pick n Pay and Halsteads bemoaned the higher than ZWG13,80 official exchange rate peg being imposed by suppliers.The grouping on their part said the suppliers were also blaming acute foreign currency shortages on the official market.
The association said Schweppes for instance was selling Mazoe Orange Crush at US$3,48 or ZWG74,70 equivalent to a rate of US$1:ZWG21,45. Willowton is selling D’Lite Cooking Oil 2 litres at US$2,89 or ZWG67,08 equivalent to an implied rate of ZWG23,21.
Colcom Country-style 500g pegged at US$3,98 is being sold at ZWG119,85 or an implied rate of ZWG30,11.
Resultantly , the retailers said they are selling such products at a loss marging ranging between 10% to 48%.
“Suppliers of goods and services into the formal retail sector are now maintaining two tier price lists for local currency and another for foreign currency- whose implied rates are way higher than the obtaining Official Exchange rate based on the banking systems Willing Seller Willing Buyer platform.
“Manufacturers and distributorship suppliers are using variable exchange rates depending on their source of foreign currency while suppliers have the flexibility of adopting variable exchange rates , formal retailers are mandated to use WBWS official exchange rate currently pegged at ZiG14,80to USD, thereby exposing retailers to massive losses,” the retailers group said.
