1 January 2013

Zambia: Rebased Kwacha Unveiled

THE rebased Zambian currency was yesterday unveiled with Government warning against hiking prices of goods and services.

The new currency becomes legal tender today as the old one is being withdrawn from the market.

At a colourful ceremony from Government complex in Lusaka yesterday, Finance Minister Alexander Chikwanda said goods and services providers should not take advantage of the change of currency to adjust prices upwards because the move would exert inflammatory pressure.

The old Kwacha would continue as legal tender until at the end of June this year.

Mr Chikwanda said the rebasing of the kwacha was aimed at addressing the inflationary spirals which over the years caused depreciation to intolerable levels.

He said it was an internationally accepted practice to rebase a currency during periods of low and stable inflations.

The country's inflation had taken a downward trend in the last five years.

Annual inflation stood at 8.2 per cent in 2006 and 8.9 per cent in 2007. Although inflation edged upwards to 16.6 per cent in 2008, it declined to 9.9 per cent as at end of 2009 and fell further to 7.9 per cent and 7.2 per cent in 2010 and 2011 respectively.

The Minister said the rebasing of the currency was premised on Government's conviction to restore the essential value of the Zambian currency as a medium of exchange by bringing normalcy to the numeration of the local currency.

He said contrary to popular belief and misperception in some sectors of society, the rebasing of the currency was not a gimmick to nab unscrupulous members of society.

Mr Chikwanda said the rebasing of the currency was a good change which everyone should embrace and cherish as it would lead to greater confidence in the currency.

Mr Chikwanda said the launch of the new currency re-affirmed Government's commitment and desire to put the country on a sound economic and sustainable growth track.

The redenominated currency series would circulate alongside the current banknotes for a period of six months from today to June 30, this year.

Mr Chikwanda said both currencies would be legal tender and should continue to be used in cash transactions until June 30th, 2013. The redenomination exercise was supported by the Re-denomination of Currency Act of 2012.

He explained that the old currency would remain available for exchange at the Central Bank,

commercial banks and designated agents for a period of 36 months, until December 31, 2015.

Mr Chikwanda thanked Giesecke and Devrient GMBH of Germany, the company engaged to print the family of the new banknotes and the South African Mint Company for minting the new coins.

The launch was attended by several senior government officials, former bank of Zambia (BOZ) governors, the international community and other stakeholders.

BoZ Deputy Governor for operations Bwalya Ng'andu said the rebased currency was made up of six notes and four coins.

Each coin had a coat of arms in front with the impression of either a bird or animal representing the abundant wildlife and tourism potential of the country.

Dr Ng'andu said that each rebased note had a unique theme embodied such as the show of women trading in a market place, representing the development of small and medium entrepreneurship, a cassava plant (representing stable food), farm workers harvesting wheat (representing agriculture) among others.

Among the new notes are the K 2 which has no currency equivalence but represents K2, 000 in the old currency value and a new K100 which had no old currency equivalence but represented K100, 000 in the old currency form.

Copyright © 2013 The Times of Zambia. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 2,000 reports a day from more than 130 news organizations and over 200 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.