Confusion on the market after the devaluation

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Confusion looms on the market after the birr was devalued against major hard currencies by 15 percent a week ago.
The government has announced that it will take serious measures following some of the commodities particularly imported items show price increment in the market.
Importers and traders that Capital interviewed said that it would be difficult if the government would take measures in relation with controlling the price increment.
They claimed that as of the devaluation date, which was October 11, imported items were cleared at the dry ports with the new devaluated rate. “The products that are cleared on the stated period with new rate are already distributed in the market,” traders claimed. “This will create a mess in controlling,” they added. They advised that the controlling body should identify the products imported before and after October 11.
Experts at the sector said that similar products distributed in the market before the devaluation and after the devaluation would have price difference that shall create confusion in the market.
“It may lead the traders to hold their products than sell it until it calm down,” they said.
“More control shall create problem in the market system so the controlling body should be cautious,” they added.
Fasika Belay, Deputy Public Relation Officer of Ethiopian Revenue and Customs Authority, told Capital that meanwhile the customs duty imposed on the period that customers or importers clearing their document when the cargo come to the customs yard, the product imported before and after the devaluation shall be identified by the date mentioned on the declaration document.
Experts argued that meanwhile the date shall be stated on the declaration it would not be easy to differentiate by the controllers.
This week the government has declared that it will take harsh measure on those who increase price on the products that are imported before the devaluation.
Market actors said that price increment is observed in imported items, while the local products particularly agricultural products have not shown increments so far.
Despite the price increment observed on the construction material and spare parts and vehicles the increment on electronic material is extra ordinary.
“In the week that the government introduced the third official devaluation, the price increment was observed but it was about five percent,” said a businessman who undertake a study via his company to understand the effect of the devaluation. “It was manageable and reasonable increment even that shall be back within weeks when the issue calm down,” the businessman who demands anonymity told Capital.
“But since the government started stating that it will take measure on those who impose price increment, the price of the products increased instead of decreasing,” he added.
Experts said that the case shall be related with hording or traders preferred to keep their items until the situation is stable, but it created some scarcity in the market.
Initially experts said that the significant devaluation would create inflation, which is now returned to double digit.
In the past the government argued that it would not make major devaluation as per the experience of the 2010, 17 percent devaluation.
However the government stated that major devaluation is required to boost the country export which is becoming stagnant to USD 3 billion for the past four years.