Government urges businesses to absorb the costs if customers pay in euros

THE FINANCE Ministry yesterday advised businesses to allow customers who pay in euro during the dual pricing period to be charged at the fixed rather than market rate to avoid misunderstandings.

Dual pricing comes into effect on September 1. It means all shops and other businesses must show their prices in Cyprus pounds and in euros.
However, the euro price that is to be displayed during the dual period is merely an indication of what the price will be on January 1.

It’s not the actual price at current exchange rates.

In July, the Cyprus pound was locked to the euro at the rate of €1=£0.585274, but this rate is not effective until January 1. Consumers who pay in euros from now must still pay at market rates, which could make the price slightly higher.

This could cause confusion among shoppers and tourists, so the Ministry is advising businesses to swallow the exchange rate and charges from September 1 to December 31, if people want to pay in euros.

“The euro is not the official currency yet,” said Director of Finance Andreas Charalambous. But, he added, “we believe they [businesses] will have problems with clients and so we are advising them to absorb the exchange rate and extra costs, but it’s only advice.”

The Ministry statement said businesses and shops should wherever possible charge people in Cyprus pounds until December 31. There was no obligation to accept euros from any customer until then, it said.
This was to “avoid complaints and misunderstandings with consumers and tourists”. The advice was issued in agreement with the Finance Ministry, the Cyprus Tourism Organisation and the Central Bank.
Consumers or tourists who feel they must pay in euros should also check with the business or shop whether the fixed rate or dual pricing rate would be applicable.

“The co-operation of all of us is essential for the successful transition to the new currency,” the Ministry said.

Many consumers are still not aware that the fixed rate is not yet in force and some have been stung when paying for items they thought would cost less than they actually did.

The Cyprus Mail is the only English-language daily newspaper published in Cyprus. It was established in 1945 and today, with its popular and widely-read website, the Cyprus Mail is among the most trusted news sites in Cyprus. The newspaper is not affiliated with any political parties and has always striven to maintain its independence. Over the past 70-plus years, the Cyprus Mail, with a small dedicated team, has covered momentous events in Cyprus’ modern history, chronicling the last gasps of British colonial rule, Cyprus’ truncated independence, the coup and Turkish invasion, and the decades of negotiations to stitch the divided island back together, plus a myriad of scandals, murders, and human interests stories that capture the island and its -people. Observers describe it as politically conservative.