Zambia is in the news today because of plans by the government to rebase the Zambian Kwacha by dividing current notes by a thousand. In essence, this will effectively make a K5,000 note equal to K5, a K10,000 note will be K10, a K20,000 note will be K20 and a K50,000 note will be K50.
Follow the Zambian media’s thoughts and participate at:
The Post Newspaper’s article, Government removes three zeros from currency, by Bright Mukwasa and Kabanda Chulu highlights how the move is intended to strengthen the local currency:
The government has knocked out three zeros from the kwacha, a move that is aimed at strengthening the local currency against major convertible currencies. And analyst Chibamba Kanyama has supported government’s move to rebase the kwacha, saying economic stability should be anchored on strong production, exports and fiscal discipline so that the zeros do not resurface.
Lusaka Times’ article, Bank of Zambia hopes the introduction of new Kwacha notes will be done within 6 months, provides a time frame of about six months for implementation:
Bank of Zambia governor Michael Gondwe said that the central bank is hoping that the procedure to introduce the new notes will be done within six months.
Zambia Daily Mail, Ngwee back! As Kwacha rebased, by Dean Mwaanga, reviews concerns regarding the printing of new notes and minting of coins:
He did not state how much the government will spend to print the new currency over the coming six months, nor did he state which company would be engaged to carry out the exercise. Rebasing will consequently mean the printing of new notes and making of new coins where they do not exist, according to John Kasanga, an economist. “The good thing the rebasing of the Kwacha will bring about is that it will be easy to transact as the zeros will be knocked off,” Mr Kasanga said. “However, the downside is that the value of the Kwacha shall not improve by knocking off of the zeros.”
Times of Zambia, Govt props up Kwacha, reviews some other changes including minimum capital requirements required for banks:
Mr Chikwanda said the Government had also increased the minimum capital requirement from the current K12 billion to K104 billion for local commercial banks and K520 billion for foreign commercial banks.
The real question is how does this affect us?