Zambia: Dollarisation controls underway

By Business Reporterkwacha.jpg
THE Governmet will soon introduce a Statutory Instrument to regulate the growing incidence of dollarisation by businesses in Zambia, Commerce, Trade and Industry Minister Felix Mutati (above) has said.

The Statutory Instrument is aimed at ensuring that all domestic
transactions are invoiced and settled in Kwacha as a way of mitigating
the effects of dollarisation on the exchange rate.

In an interview, Mr Mutati said the move would ensure that business
firms followed the law by making domestic transactions in Kwacha
failure to which appropriate measures would be applied.

The Kwacha is the legal tender for Zambia and as such, all domestic
transactions should be invoiced and traded in Kwacha to curb the
effects of dollarisation, the minister said.

Mr Mutati warned that there would be penalties for any firm demanding
foreign currencies at the counter rather than the local currency for
any domestic transactions in both goods and services.

Dollarisation tends to increase demand for foreign currencies like the
dollar because transactions in some domestic goods and services is
requiring foreign currencies rather than the local currency, he said

Mr Mutati said the Government would also encourage the maintenance of
dollar accounts for the purpose of foreign direct earnings.

The minister however, said the Government would maintain an open market system in the foreign exchange.

Meanwhile, Mr Mutati has urged the bank to introduce products that were gender friendly.

He said there was need for the bank to introduce products that would support rural growth.

He commended Standard Chartered Bank for supplementing Government's effort by
introducing the mobile banking and that the move would help break
barriers of traditional banking to more convenient and accessible.

The product was achieved through efficient contribution of the
telecommunication industry towards the growth and development of Zambia.

Times of Zambia

Post published in: News

Leave a Reply

Your email address will not be published. Required fields are marked *