16 November 2012

Zambia: Kwacha Rebasing Won't Impact On Inflation - BOZ

THE Bank of Zambia (BoZ) has said the rebasing of the Kwacha will not cause any rise in inflation in the country as there is no link between the two.

BoZ Ndola regional senior economist Steven Musuku dispelled fears linking the rebasing of currency to inflation contending that the exercise had nothing to do with inflation.

He said the rebasing of the Kwacha was not going to have any impact on inflation and that fears that once rebased, the currency would again be hit by inflation were unfounded.

Mr Musuku was speaking on the sidelines of a Standard Chartered Bank organised 'currency rebasing' forum held at Kitwe's Moba Hotel on Wednesday.

Mr Musuku said the current macro-economic stability and positive growth of the economy with a single digit inflation figures had given Zambia a perfect opportunity to rebase the currency.

"I don't think Zambia will go back to that episode when inflation levels rose to as high as 188 per cent because the economy is doing good, as seen from huge investment particularly in the mining sector and so this presents the country a good opportunity to rebase the currency," Mr Musuku said.

He said there was need to understand that the rebasing of the currency was aimed at addressing the loss in value of the currency due to accumulative inflation figures that occurred in the 1990s.

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