HomeBusiness DigestLandlords ignore forex rules

Landlords ignore forex rules

Ngoni Chanakira

THE Reserve Bank of Zimbabwe (RBZ)’s threat to deal with landlords asking for foreign currency for their designer mansions seems to have fallen on deaf ears as they are s

till advertising their properties insisting they want payment in hard currency.

However, in a new twist to the development, some of the landlords are now requesting payment either in foreign currency or the Zimbabwe dollar equivalent using parallel market rates.

Houses are going for between US$20 000 to more than US$100 000 in the upmarket suburbs of Harare such as Mt Pleasant, Borrowdale, Helensvale, and Gunhill.

Investigations by businessdigest this week revealed that landlords were using parallel market rates ranging from $7 000 to $10 000 for the United States dollar.

The US greenback is however officially pegged at $824 against the Zimbabwe dollar.

RBZ acting governor Charles Chikaura in an interview recently told businessdigest that the Zimbabwe dollar was the “legal tender in the country” and, as such, all payments must be made in local currency.

He said a dispensation was, however, given to hotels and other tourist specialist services to receive payment in foreign currency.

This measure, he said, became necessary to improve convenience for the country’s visitors, while at the same time encouraging foreign exchange inflows.

“Requiring payments for rentals, properties or other goods and services in United States dollars is, however, illegal,” Chikaura said.

“Again, collective action by both the RBZ and other law enforcement agents is critical in dealing with this problem.”

The acting RBZ boss said he was working closely with the ZRP, the National Economic Conduct Inspectorate, and the Zimbabwe Revenue Authority to deal with the serious foreign currency issue.

However, a three-bedroomed flat in Eastlea suburb said to be in “excellent condition” was this week advertised for US$40 000 or the Zimbabwe dollar equivalent.

The agent refused to say how much this “equivalent was”, insisting that the figure could only be disclosed to “serious buyers”.

Another property in Mt Pleasant was going for US$70 000 or the Zimbabwe dollar equivalent.

The agent said the deal could only be revealed to serious buyers, but insisted the owner preferred payment in foreign currency.

In Zimbabwe dollar terms, some of these mansions are going for between $100 million and $900 million.

A house in Ballantyne Park was this week advertised for a cool $1 billion.

The property was described as an executive home offering five bedrooms, two bathrooms (main ensuite), two lounges, fitted kitchen, lockup garage, self contained cottage, pool and all weather tennis court.

In the high-density areas, on the other hand, houses are fetching between $20 million and $100 million.

Chikaura said due to persistent mismatches between demand and supply of foreign exchange, a parallel market for foreign exchange had developed.

“Parallel markets for foreign exchange develop whenever demand outstrips supply, particularly if the official price does not respond accordingly,” he said.

“Whereas in many developing countries, widespread trade restrictions and stringent foreign exchange controls have led to proliferation of parallel markets for foreign exchange, the Zimbabwean situation arose from persistent macro-economic imbalances, in particular high inflation.

“Speculators have taken advantage of the resultant crippling foreign exchange shortages to continuously depreciate the exchange rate, for desperate importers, in the parallel market.”

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