The New Zambian Currency
On January 16, 1968, the Kwacha replaced the Pound as the new Zambian currency. The new notes where called Kwacha
and the coins where known as Ngwee. In Nsenga, one of the local languages from the Eastern province, the term Kwacha
means dawn and Ngwee means bright.
History Of The Kwacha
At the time of replacement, 1 pound was the equivalent of 2 Kwacha. And a one Kwacha note of the new currency was divisible into 100 Ngwee. Initially, in exchange terms, the Zambian currency was at par with the Dollar.
From 1968 onwards, the Zambian currency has under gone a lot of changes along the way. But perhaps the most noticeable change had been the removal of the portrait of the then President Kenneth Kaunda. The notes that were produced after 1992 featured a fish eagle instead of a human portrait. In 2003, polymer notes were issued in Zambia, for the first time in the countrys history and Zambia was the first country to do so in Africa.
But after undergoing devaluations as a result of high inflationary rates for a prolonged period of time, the Bank of Zambia decided to rebase the Kwacha. The Kwacha had lost its value against major international currencies and smaller notes together with the Ngwee had become worthless and no longer of use.
The move has been seen as plausible at the moment because of the prevailing low inflation, which had been going at single digits for some time now. And the Kwacha has been wavering at about 5,000 Kwacha to 1 United States Dollar for months.
The Kwacha Is Rebased
The bank of Zambia had set 1 January 2013 as the date of rebasing from the old to the new Kwacha.
The new Kwacha will be circulating alongside the old notes for a six-month period starting on January 1,
2013 to June 30, 2013. The new ISO code for the newly rebased Kwacha is ZMW. The rebased Kwacha became legal tender
or came into circulation on 1 January 2013. The introduction of the rebased Kwacha will be gradual.
Zambian New Currency
Zambias finance minister Mr Alexander Chikwanda said the changeover or the rebasing of the Kwacha wont have any effect on the purchasing power of the currency because the rebasing exercise will just be an issue of dividing the Kwacha by 1000, or in other words knocking off three zeros.
Although the launch of the rebasing exercise started off smoothly in most parts of the country, some Zambians in rural areas were not aware of the rebased currency and in some instances refused to do any business transaction with the customers having the new notes.
Supporters of the new Zambian currency give many potential benefits of the new currency. The elimination of the three zeros will have the most direct impact when it comes to carrying money. If you were carrying huge amounts of money around using the old notes, it means you will now be carrying just a fraction of it with the new notes.
Critics of the rebasing exercise have however condemned it as a sheer waste of money. They reason that there are better ways of spending money considering the numerous problems in Zambia, than spending it to mint new money.
The New Kwacha Fact Sheet
- One US Dollar is worth a little more than KR5
- Kwacha notes will be in seven denominations: 2, 5, 10, 20, 50 and 100 notes
- One Kwacha and Ngwee coins will be in denominations of: K1, 5, 10 and 50.
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