Zambia to rebase Kwacha, do away with notes higher than K50

Zambia to rebase Kwacha, do away with notes higher than K50

Zambia will rebase the kwacha currency by lopping off three zeros Finance Minister Alexander Chikwanda has announced.

Though Chikwanda chose to speak in technical jargon probably to hide what the government is really planning to do, rebasing the currency involves replacing the existing bank notes with new ones.

It would mean that 50,000 Zambian Kwacha would become 50 Zambia Kwacha and would revaluate to an amount designated by the Bank of Zambia.

This means that K50 will be the highest denomination in circulation and all other denominations will be recalled from circulation.

Chikwanda said the move should make it easier for foreign investors to participate in the economy,

“The rebasing had to be done when all the fundamentals like inflation and GDP growth were right and we think they are now right,” Chikwanda said.

In recent years two countries Irag and Zimbabwe are known to have rebased their currencies.

And Chikwanda said Government would also raise commercial banks’ capital requirements to 104 billion kwacha, and 250 billion kwacha for foreign commercial banks from 12 billion kwacha to make them more resilient to economic shocks.

 

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