ECONOMIST Dr Lubinda Haabazoka says the Central Bank’s decision to require domestic transactions to be settled exclusively in local currency should be understood as a stabilisation measure rather than a restriction on economic activity. Recently, the Bank of Zambia (BoZ) issued Currency Directives, reinforcing the legal requirement that all domestic transactions be settled in Zambian Kwacha, in accordance with Section 18 of the BoZ Act. In an interview, Sunday, Dr Haabazoka said one of the most important links between the Currency Directives and inflation lies in monetary policy effectiveness. “From a macroeconomic standpoint, the Bank of Zambia’s decision to require domestic transactions to be settled exclusively in Kwacha and Ngwee should be understood as a stabilisation and confidence-building measure rather...
