Kwacha to get on SADC funds transfer system

By BUUMBA CHIMBULU
THE Bank of Zambia (BoZ) is in the process of ensuring that the Kwacha is among the settlement currencies on an electronic cross border funds transfer system for the Southern African Development Community (SADC) region.
The Integrated Regional Electronic Settlement System (SIRESS) is an electronic cross border funds transfer system that facilitates settlement of funds within the region in real time and on a gross basis.
A total of 15 out of the total of 16 SADC member countries are participating in the SIRESS.
BoZ Governor, Denny Kalyalya, said efforts were being made to include the Zambian Kwacha as a settlement currency on SIRESS.
Dr Kalyalya said trading on the platform was already taking place.
He was responding to concerns from Zambia Chamber of Commerce and Industry (ZACCI) President Chabuka Kawesha on progress made on SIRESS.
“SIRESS was birthed in 2009 and implementation kicked off in 2010, with South African Reserve Bank (SARB) being appointed as the operator of the system on behalf of the region.
“Currently the South African Rand was the settlement currency. The idea was to get the Zambian Kwacha on the platform. We are trying to speedup this process especially in the context of the current Coronavirus (Covid-19),” Dr Kalyalya said.
The Governor explained that if Zambia was using the settlement platforms such as SIRESS, some of the pressure being experienced such as the exchange rate would not be felt.
Dr Kalyalya noted that apart from the correspondent banking charges, even the VISA systems being used in the markets had to be cleared in a certain country and that was very expensive.
“If we were using some of this we shouldn’t have seen some of the pressures that we are seeing on the Kwacha-United States dollar exchange arrangement,” he said.
According to BoZ data, the volume of transactions processed by all countries has increased by an annual average of 92.2 per cent since the implementation of the system from 2014 to 2018.
In terms of performance of Zambia’s payments on the SIRESS, the volume and value of transactions increased by an annual average of 115.7 per cent and 96.4 per cent to 20,008 transactions and ZAR5.723 billion in 2018, respectively.