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Sticker Shock In Zimbabwe As Officially Sanctioned Hard Currency Shops Open

Shops and fuel stations in Zimbabwe licensed to charge for goods in hard currency opened for business this week amid complaints that their prices were exorbitant.

Supermarket chain Spar was among retailers who also sell items for local currency. But sources said shelves were still empty at the TM-Hyper and OK chains. Smaller shop owners said they were still trying to pull together enough hard currency to restock.

An official at the Consumer Council of Zimbabwe said business people in Bulawayo were still trying to gauge public reaction to paying hard currency for ordinary commodities.

The state run-Herald newspaper reported that Spar Borrowdale Brooke was offering 20 kilos of roller meal for US$18.50, flour for US$3.50 and two litres of cooking oil for US$8.

Correspondent Mark Peter Nthambe offered a first-hand look at so-called Foreign Exchange Licensed Warehouses and Retail Shops, in an interview with reporter Brenda Moyo.

National Income and Pricing Commission Chairman Godwills Masimirembwa told reporter Patience Rusere of VOA's Studio 7 for Zimbabwe that the advantage of the hard currency pricing is that prices can readily be compared. Masimirembwa added that his commission intends to take action against overpricing goods for sale in the local currency.

The officially sanctioned launch of hard-currency shops follows a well-established trend of dollarization in the battered Zimbabwean economy. Many goods are offered in the parallel or black market only for hard currencies, and many landlords demand rents in forex.

Meanwhile, banks were running out of local currency despite the introduction last week by the Reserve Bank of notes in higher denominations of Z$10,000 and Z$20,000.

Bankers say they are not receiving enough notes from the Reserve Bank, while others blame the central bank's suspension of electronic transfers last week for the intensification of the cash crunch, as consumers and businesses deprived of the electronic payments system now need significantly more cash to carry out essential larger transactions.

Economist Prosper Chitambara told reporter Jonga Kandemiiri that although hyperinflation is the root cause of chronic cash shortages, the central bank has failed to provide the banking system with enough physical banknotes.

More reports from VOA's Studio 7 for Zimbabwe...