The Bank of Zambia is moving forward with plans to reinforce the kwacha as the sole legal tender for domestic transactions.
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The Bank of Zambia is moving forward with plans to reinforce the kwacha as the sole legal tender for domestic transactions. While the central bank stands firm on its de-dollarization strategy, it also seeks feedback from various stakeholders, including critics of the proposal. Governor Denny Kalyalya clarified that the initiative is not a new proposal but rather an enforcement of existing laws.
Engaging with Stakeholders on De-Dollarization Efforts
The Bank of Zambia has announced a cautious approach to implementing the ban on using U.S. dollars for local transactions. Governor Denny Kalyalya emphasized the importance of considering input from all stakeholders before making a final decision.
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A recent report reveals that the Bank of Zambia is actively engaging with stakeholders concerning its controversial de-dollarization plans. The International Monetary Fund (IMF) has raised concerns about the potential negative impacts of these plans, warning that penalizing non-compliance could undermine efforts to control inflation. Zambian business organizations have also expressed opposition, prompting a response from the central bank.
Governor Kalyalya stressed that the central bank’s actions are in line with its legal mandate. The goal is to ensure compliance with laws that establish the kwacha as the sole legal tender for domestic transactions. “We have noted a frenzy of people going out to the media saying we are discouraging the use of the dollar. That is not the case; we just want to reinforce the law,” Kalyalya stated. He added that the proposed regulations aim to bolster the enforcement of monetary policy, enhancing the stability of Zambia’s financial system.
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Kalyalya mentioned that the Bank of Zambia is still in the process of gathering feedback but urged stakeholders to respect the final outcome of the consultations.
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