By BUUMBA CHIMBULU
THE Bank of Zambia (BoZ) has defended its 10-year penalty for those using foreign currency to conduct domestic transactions, stating that it is stipulated in the law.
The central bank has, however, clarified that the penalty would only come into force once offenders went through the due process of the law, including appearing before the courts.
BoZ Governor, Denny Kalyalya, said this yesterday in Lusaka during the Monetary Policy Rate announcement meeting.
“The current law, Bank of Zambia Act No.5 of 2022 if you look at section 18, it clearly states that the kwacha ngwee is the sole legal tender in the republic and any other assets that the bank approves. So, that is what is motivating us to move forward with this,” Dr Kalyalya said.
“The other thing is that the penalty which I think scared many people, that how can you…just by holding foreign currency, be subjected to a 10-year term? That is also provided in the law section 74 of the BoZ Act which stipulates that the maximum that one can be sanctioning can face is 10 years of penalty,” he said.
Responding to a question on the advancement of the currency regulation consultation with stakeholders, particularly on de-dollarization, Dr Kalyalya said they were going on smoothly.
He stressed that the currency regulation was a campaign launched by the BoZ to promote the use of the Kwacha for domestic transactions.
Dr Kalyalya spelt out effects of de-dollarisation such as blunting the monetary policy tool and over displacing the Kwacha as the local currency.
He also pointed out that the ability to manage supply in the economy by the central bank was equally affected by de-dollarisation.
“We hope by the end of this month, if all goes well, concluded the consultations. Tomorrow (today) we are meeting two groups, we have met a number already and we are yet to go outside Lusaka.
“I think there is fair amount of appreciation that we are not talking about exchange control, far from it. What we are talking about are transactions of the domestic nature.
If you want to buy water, if you go to the salon or take a child to school, why should you be charged in dollars?” Dr Kalyalya wondered.
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