The Herald

Zambia emulates Zim, targets illegal money changers

Bank of Zambia

Herald Reporter 

The Bank of Zambia has introduced a new law prohibiting ordinary citizens from trading in foreign exchange to stabilise the economy and stop manipulations of the Kwacha exchange rate.

Under the gazetted regulations, only authorised dealers are now permitted to engage in foreign exchange trading, effective immediately. 

This comes as Zimbabwe has taken a similar step, introducing its own new currency as part of a gradual transition towards a sole currency regime. Zimbabwe has been using a multi-currency system and aims to phase out the use of foreign currencies in domestic transactions and promote its local currency, the ZiG.

The Bank of Zambia’s move is seen as a crucial step towards stabilising the economy and promoting financial inclusion.

The introduction of the new law is expected to have a positive impact on the economy, as it will help to reduce the demand for foreign currency and promote the use of the Kwacha. 

“For a person resident or registered to operate in Zambia, the trading of Kwacha for foreign currency shall only be done with an authorised dealer.

“This means that any person resident in Zambia or any corporate entity registered to operate in Zambia shall only transact (that is, buy or sell Kwacha) with a local commercial bank, bureau or any other financial institution licensed by the Bank of Zambia to carry out foreign exchange operations.

“In other words, the buying or selling of foreign exchange against the Kwacha by any person resident in Zambia or any corporate entity registered to operate in Zambia is only allowed when conducted with a local commercial bank, bureau or any other financial institution licenced by the Bank of Zambia to carry out foreign exchange operation,” said the statement.