Bank of Zambia defends 10 years penalty for using foreign currency in domestic transactions

The Bank of Zambia (BoZ) has defended its 10-year penalty for using foreign currency in domestic transactions, asserting that it is mandated by law.

However, the Central Bank clarified that the penalty would only be imposed following due legal process, including court proceedings.

BoZ Governor, Dr. Denny Kalyalya, addressed this during the Monetary Policy Rate announcement meeting in Lusaka on Wednesday.

Read more: Central Bank governor, Kalyalya, says de-dollarisation policy not about forex market controls

“The 10-year penalty is stipulated in the law for de-dollarisation. Offenders must go through the court process before facing such a penalty,” Kalyalya said.

Responding to queries about the progress of currency regulation consultations with stakeholders, particularly regarding de-dollarisation, he noted that these consultations were proceeding smoothly.

Kalyalya emphasized that the currency regulation campaign aimed to promote the use of the Kwacha for domestic transactions.

He highlighted the effects of de-dollarisation, including the impact on monetary policy tools and the displacement of the Kwacha as the local currency.

“The ability to manage the economy’s supply is also affected by de-dollarisation,” Kalyalya added.

He expressed hope that the consultations would be completed by the end of the month, stressing that the initiative is a campaign to encourage the use of the local currency in Zambia.

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