Opinion / Columnist
Inject more bond coins please
29 Oct 2015 at 16:57hrs | Views
As the South African Rand continues to lose value by each day, it is now worrisome that some business people, shop owners and transport operators are not accepting rands from their clients citing a number of challenges which among them low value against other currencies on the market.
The South African rand coins have been in circulation for quite a long time. It has been circulating together with the bond coins which were introduced by the Reserve Bank of Zimbabwe (RBZ) in 2014. Previously, the rand was exchanged at a 1: 1 exchange rate with the bond coins. However, crisis has now risen in the market due to further weakening of the rand. Currently, the 5 Rand coin is now equated to 20 cent bond coin, because of its lower value.
However, this has affected the convenience of change. Usually, coins are necessary on the market because of their convenience in transactions. Coins make transaction easy, especially on the issue of divisibility of cash. Most business people are now accepting only bond coins at the expense of rand coins. This is greatly affecting the free circulation of money on the market.
Government's efforts of introducing bond coins in the market was commendable as their purpose is mainly to ease change shortage problems that most customers were encountering after purchasing groceries from shops, as well as pricing structures by dealers. However, the chief current problem is that the bond coins circulating in the market are too few hence failing to accommodate the day to day business transactions on the market countrywide.
Therefore, the Reserve Bank Governor, Doctor John Mangudya should be adviced to consider injecting more bond coins in the market to encourage free circulation and transactions.
Our country's economy is mainly dominated by the United States dollar and South African rand for most transactions. However, because of its lower value the Rand is affecting business as most shops and public transport operators are now rejecting it completely.
Some shops have gone back to the habit of rounding off prices and giving consumers vouchers that would not be accepted in other shops or forcing them to accept sweets, pens, matches or trivialities as consolation of their cash because they lack minor denominations (bond coins) for change.
Adding more bond coins in the market will also assist in the reducing liquidity crunch in the economy.
At the moment, Dr Mangudya must intervene in the current situation maybe by putting a policy measure on the correct accepptable exchange rate of the Rand against other currencies on the market.
As it stands, most shop owners or transport operators are just declaring whatever amount they may wake up thinking as an exchange rate that for that day. At the end of the day it is the consumer who suffers most as they will be a lack of transparency in most transactions.
Therefore, it is imperative for the RBZ to promptly attend and solve this problem to encourage clearness of transactions between the general populace and the business community.
The South African rand coins have been in circulation for quite a long time. It has been circulating together with the bond coins which were introduced by the Reserve Bank of Zimbabwe (RBZ) in 2014. Previously, the rand was exchanged at a 1: 1 exchange rate with the bond coins. However, crisis has now risen in the market due to further weakening of the rand. Currently, the 5 Rand coin is now equated to 20 cent bond coin, because of its lower value.
However, this has affected the convenience of change. Usually, coins are necessary on the market because of their convenience in transactions. Coins make transaction easy, especially on the issue of divisibility of cash. Most business people are now accepting only bond coins at the expense of rand coins. This is greatly affecting the free circulation of money on the market.
Government's efforts of introducing bond coins in the market was commendable as their purpose is mainly to ease change shortage problems that most customers were encountering after purchasing groceries from shops, as well as pricing structures by dealers. However, the chief current problem is that the bond coins circulating in the market are too few hence failing to accommodate the day to day business transactions on the market countrywide.
Therefore, the Reserve Bank Governor, Doctor John Mangudya should be adviced to consider injecting more bond coins in the market to encourage free circulation and transactions.
Our country's economy is mainly dominated by the United States dollar and South African rand for most transactions. However, because of its lower value the Rand is affecting business as most shops and public transport operators are now rejecting it completely.
Adding more bond coins in the market will also assist in the reducing liquidity crunch in the economy.
At the moment, Dr Mangudya must intervene in the current situation maybe by putting a policy measure on the correct accepptable exchange rate of the Rand against other currencies on the market.
As it stands, most shop owners or transport operators are just declaring whatever amount they may wake up thinking as an exchange rate that for that day. At the end of the day it is the consumer who suffers most as they will be a lack of transparency in most transactions.
Therefore, it is imperative for the RBZ to promptly attend and solve this problem to encourage clearness of transactions between the general populace and the business community.
Source - Chido Chikuni
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