The Bank of Zambia has defended its de-dollarization plans but also seeks input from stakeholders who oppose the proposal. The central bank governor clarified that they are not proposing anything new; instead, the bank aims to enforce existing laws designating the kwacha as the sole legal tender for domestic transactions.
Zambia De-Dollarization: Central Bank Seeks to Enforce Kwacha as Sole Legal Tender for Domestic Transactions
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Zambia’s Central Bank Seeks Input from De-Dollarization Opponents
The Zambian central bank has announced that the Southern African nation will carefully implement the proposed ban on the use of U.S. dollars for local transactions. However, Denny Kalyalya, the governor of the Bank of Zambia (BOZ), emphasized that the apex bank is actively seeking input from stakeholders, including those who oppose the proposal, before making a definitive decision.
A recent report indicates that the BOZ is actively seeking input from stakeholders over its widely criticised de-dollarization plans. The International Monetary Fund (IMF) is one of the organizations that have expressed reservations about Zambia’s plan to punish individuals who fail to comply with regulations promoting the use of the local currency.
As recently reported by Bitcoin.com News, Eric Lautier, the IMF’s Zambian representative, argues that implementing the plan could be counterproductive and may even undermine efforts to control inflation. Zambian business organizations have similarly criticized the de-dollarization plans, prompting the BOZ governor to respond.
However, in his remarks, Kalyalya emphasized that the central bank is merely fulfilling its mandate as required by law. Specifically, the central bank wants businesses to uphold the law designating 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 said.
He argued that, in addition to enforcing existing laws, the Bank of Zambia (BOZ) hopes to use the proposed regulations to strengthen the implementation of monetary policy. The central bank chief said he expects the implementation of the proposal will enhance the stability of Zambia’s financial system.
Kalyalya disclosed that the BOZ is still gathering views but urged stakeholders to accept the outcome of the consultation process.
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