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Zimbabwe Business Community Encourages Dollarization Trend

Zimbabwe business leaders have urged the Reserve Bank of Zimbabwe to extend a Sept. 22 deadline for retailers and wholesalers to seek permission to price their goods in hard currency, saying this will give more companies access to needed foreign exchange.

Deliberating at a breakfast meeting called Tuesday by the Harare Chamber of Commerce, business people agreed to send the request to the RBZ and the Finance Ministry so the licensing process would not be a one-off event but a continuing process.

The Central Bank earlier this month solicited applications recently from 1,200 businesses for permission to price goods and transact in hard currency – but in fact many shops in the country are already demanding hard currency payment for their goods and the so-called process of dollarization is well advanced.

Harare Chamber of Commerce Chairman Tendai Mavhima told reporter Patience Rusere of VOA's Studio 7 for Zimbabwe that the dollarization trend has helped businesses that must import goods that can only be paid for in hard currencies.

Ordinary Zimbabweans, meanwhile, have little choice but to pay for key commodities in hard currency on parallel markets.

In another development, the Consumer Council of Zimbabwe said National Foods has started selling flour for U.S. dollars at a price of US$1.10 for one kilogram.

Meanwhile in the parallel or black market, cooking oil is being sold for US$2.60 a liter, while maize meal was going for $US13.00 for 20 kilograms.

Some basics continue to be sold in local currency. Bread fetches Z$1,500 a loaf, sugar costs Z$800 a kilo, and sour milk, a kind of yogurt, goes for Z$10,000 a container.

Economist Naome Chakanya of the Labor and Economic Development Research Institute of Zimbabwe said holders of commodities are pegging prices to parallel market rates.

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