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Weak rand drives computer prices higher

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With the continued weakness of the rand against the dollar, the cost of computer equipment looks set to rise – even though some prices have already risen by more than 15% during the course of this year.
This is according to Christopher Riley, CEO of The Notebook Company, who says: “The Notebook Company has been forced to up its prices this year. Due to the weakness of the rand against the dollar each shipment of computer goods needs to be considered to see if a price hike is required.

“We don’t see the rand improving any time soon, so the prices of certain computer products will remain considerably higher than last year,” Riley adds.

He said the price of laptop and certain accessories provided by The Notebook Company had seen a 15% increase “on average” since January. “We just cannot absorb the weakness of the rand,” he says.

The dollar always affects the price of computer goods as their base prices are quoted in dollars. Due to the South African currency devaluation – or when the dollar emerges stronger – computer prices are almost immediately affected.

“Some computer stock is flown in – and some is shipped in. When products are flown in, it is easy for vendors to adjust their prices timeously. But when they are shipped in the prices can be effected while the products are still at sea, meaning that computer vendors cannot always foresee higher costs. Vendors, in these instances, have to take a price knock until adjusting prices for the next shipment,” says Riley.

He adds that it is “very likely” that further price hikes will be implemented over the next few months – unless the rand rallies “strongly”.

Four years ago the rand was at R6.50 to the dollar; now it is R12 to the dollar. In theory this means computer equipment costs 85% more now, Riley says.