South Africa can expect lower tech prices.
- Frederik Herholdt
- Feb 21, 2018
- 1 min read
South Africans can expect reduced prices on their technology and computing products, but not immediately as it might take time for the rand's new strength to show.
Esquire CEO Mahomed Cassim, said that the rand's new strength means that tech prices will drop. However SA might have to wait a little bit to see this reflect. This is due to something called, "forward-cover". Forward-cover is a financial tool, provided by financial institutions, that fixes the exchange rate when companies are buying or selling in another currency.
Why do companies use this financial tool?
This tool makes it possible for companies to keep prices steady when dealing with risky or uneasy currencies, like ZAR.
The Esquire CEO added that whatever pricing relief they received, based on the lower exchange rate, has already been passed on to their clients.
Cassim added, “We are confident that if the rate of exchange remains steady to what it is now, it will allow even more pricing to fall,”.
Matrix Warehouse said that their price drop might take three months to filter through. The lower prices relies on the exchange rate staying favourable, and the availability of products.
“If there is a shortage on a product, the unit cost goes up as the value of that specific product increases,” Matrix said.
Posted 21 February 2018 | Frederik Herholdt
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