A draft document released by the Bank of Zambia has revealed that individuals caught using foreign currency for local transactions could face up to ten years in prison or substantial fines, Report informs referring to IOL.
Soon to be formalized as a statutory instrument by the Minister of Finance and National Planning, these new guidelines will require all local public and private transactions to be conducted in Zambian kwacha (ZMW) and ngwee.
This policy, announced by the central bank’s Deputy Governor for Operations, Francis Chipimo, at a trade fair in Ndola, emphasizes the importance of using local currency during the travels.
The Bank of Zambia's initiative is designed to curb the use of foreign currencies, particularly the US dollar, in local transactions.
Chipimo highlighted the detrimental effects of dollarization on the country's economy, noting that it hinders effective monetary and exchange rate policy management.
Additionally, reliance on the dollar increases credit and liquidity risks and diminishes the central bank’s influence, as dollar-denominated credit markets do not respond to the Bank of Zambia’s actions.