The Centre for Trade Policy and Development (CTPD) has supported the call by the Bank of Zambia (BoZ) to curb the increasing use of the dollar for local transaction and stands.
CTPD Head of Research, Ibrahim Kamara, says this is because reinforcing the Kwacha as the primary currency for transactions will help restore its respect and enhance financial stability.
“CTPD holds de-dollarization as an essential step to restore not only the Kwacha’s respect, but also for long-term stability and growth of Zambia’s financial system,” said Mr. Kamara in a statement issued to RCV News in Lusaka today.
He said the practice of quoting prices in dollars diminishes the relevance of the Kwacha in day-to-day transactions, rendering monetary policy tools less effective.
“For monetary policy tools such as the Monetary Policy Rate (MPR) to be effective, the central bank must be able to influence the demand for the local currency,” said Mr. Kamara.
By Eva Hatontola
