Bureau de Change President Paul Kalumba has […]

Bureau de Change President Paul Kalumba has noted that the new regulation stipulated by the Bank of Zambia for all local transactions to be made using the Zambian Kwacha has reduced the demand for US dollars and strengthened the exchange rate.

Speaking in an interview with Zambian Business Times (ZBT), Kalumba noted that Bureau de Change companies had a lot of artificial demand for US dollars driven by local transactions, but with the directive from the central bank, the demand for dollars has lowered.

“Artificial demand was being caused by local transactions, because they are individuals that built houses in Zambia using cement, and at the end of the day they started charging in dollars, creating a lot of pressure on the Kwacha,” said Kalumba. He added that as much as the policy is positive in helping remove artificial Forex demand on the market, the bureau sector, on the other hand, is affected.

“We have suffered a reduction in the supply and demand for dollars on the market owing to the fact that most individuals are no longer demanding dollars due to the directive by the central bank for local transactions obligated to be made in Kwacha,” said Kalumba.

“The demand for US dollars has gone down, and the benefits are that the exchange rate improves, because if all those individuals that were paying rent, school fees, and many other things in US dollars were still on the market, that would have forced the country to look for dollars to sell to these individuals.” Kalumba commended the central bank for the decisive step, stating that it has ultimately curbed artificial demand, thereby killing imported inflation

Article by Justine Phiri