Get ready for rebasing of the Kwacha– BoZ
THE Bank of Zambia (BoZ) has urged business houses to prepare adequately to ensure they change all accounting packages and related software in readiness for the currency rebasing implementation to avoid any risk of failure.
BoZ currency rebasing manager Morris Mulomba says the deadline date for preparedness has been set at least three months before the change-over to ensure that all entities are ready for the process and to avoid any risk of failure.
Mr Mulomba said this in Siavonga over the weekend during a discussion with commercial banks dubbed Kwacha Rebasing, Opportunities and Costs.
He called on banks to re-calibrate some equipment such as the automated teller machines, bank note counting machines and accounting software to accommodate the rebased Kwacha.
“Every payment obligation or commitment previously entered into should automatically be re-expressed in the rebased Kwacha. The rebased currency will continue to be the Kwacha (K) and the coins will also have ngwee or n,” he said.
Mr Mulomba said to achieve an easier, effective and quicker familiarisation with the rebased currency, during the period of transition (six months), a new symbol to be determined will be added to the existing symbol K, example KR for pricing purposes only.
He said new cheque books with the KR may be required during the initial six months.
He said there will be an instruction to the public not to issue post-dated cheques with a date beyond the change- over date as this will cause confusion.
Mr Mulomba said the cost associated to rebasing will not be huge and warned commercial banks not to transfer the charge to customers but treat them as business costs.
“I take it that costs associated with the rebasing should be absorbed within their income and this should not result in increased charges to customers.
“This cost should be treated cautiously and we do not anticipate any increment or inconveniences to customers as a result of rebasing,” he said.
Mr Mulomba said during the cash exchange exercise, commercial banks will not be expected to levy charges for rebasing transactions as a lot of customers will be going to the banks with huge sums of money for exchange.
He said Kwacha rebasing is a national exercise that must be given the importance it deserves as the success of the exercise will largely depend on the commitment and collaboration of all key stakeholders and the public.
Mr Mulomba said the rebasing of the Kwacha will lead to the replacement of all notes and coins currently in circulation by a new family of notes and coins.
The exercise will also involve a wider review of the currency and enhancing security features of the Kwacha notes.
He said during the transition period of six months, the old and rebased currency will circulate simultaneously.
He said through the transition period, prices of goods and services, other payment commitments, exchange rates and taxes will have to be adjusted to conform to the rebased currency.