Policy inconsistencies: PF raises amount of forex deposits, withdrawals

The PF regime, through its Bank of Zambia has raised the foreign exchange transaction limits for companies and individuals holding accounts with commercial banks in another poorly planned attempt to encourage hard currency deposits, forex traders said.

Zambia’s kwacha currency went into freefall in September as prices for its copper exports hit a one-month low. The southern African country faces external challenges including weak commodity prices, Finance Minister Alexander Chikwanda said in the 2016 budget last week.

The limit of foreign exchange that companies holding accounts with commercial banks can buy or sell over the counter was raised to $100,000 from $5,000 per day, the central bank said in a circular to heads of commercial banks dated Oct 9.

Individuals holding accounts with commercial banks can now buy or sell up to $20,000 from $5,000 per day, it said.

“This has no effect on the kwacha but allows traders who deal in dollar cash to deposit more dollars per day,” BancABC country head of Treasury John Mapiye told Reuters

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