FINANCE Minister Alexander Chikwanda has revoked Statutory Instrument numbers 33 and 55 to allow for further consultations amidst the free fall of the Kwacha.
The local currency has depreciated by up to 13 per cent since the last quarter of 2013.
The SI33 of 2012 recognises the Kwacha as the legal tender in Zambia and prohibits the use of any other currency to quote for prices or to demand payment of any services or goods.
The SI 55 of 2013 empowers the Bank of Zambia (BOZ) to put in place measures for monitoring all transactions that involve the sending and/or receiving of funds.
The main objective is to monitor balance of payments in a transparent and accountable manner.
Mr Chikwanda has described the fall of the Kwacha as temporary, saying the factors affecting the current exchange rate were domestic and external.
He was speaking at a Press briefing in Lusaka yesterday.
He said Government had decided to revoke the two Sis, which were meant to support the implementation of monetary policy, to allow for further consultations.
The minister said Government, in consultation with other stakeholders, would look at other veritable options to safeguard public interest.
He said Zambia’s economy had remained strong and stable with a real Gross Domestic Product (GDP) growth preliminary outturn at 6.4 per cent.
The economy, he said, had grown at an annual average rate of 6.9 per cent since 2011 when the Patriotic Front Government assumed office.
Mr Chikwanda called for intensified efforts aimed at enhancing Zambians’ participation in the economy.
He said the current depreciation of the currency did not necessarily imply a weakening of Zambia’s economic fundamentals, adding that Government would not use the foreign reserves to redeem it.
“The weakening in the Kwacha parity is temporary and Government will not be tempted into interventions that may just end up affecting our reserves as doing so will only artificially stabilise our exchange rate and make us more vulnerable in case of continued volatility,” he said.
He said Government would in the long term increase the country’s resilience to shocks by accelerating the diversification of the economy away from copper to ensure resilience to global financial shocks.
He called for the expansion of the productive capacity by investing in infrastructure development.
“Our transport network and energy supply need to expand to support private sector growth and lower the cost of doing business.
“We also need to invest in our education and health infrastructure and staff so that we build the people,” Mr Chikwanda said.
He admitted that 2013 was a challenging year which resulted in the fiscal deficit increasing from the planned 4.3 per cent of GDP to a preliminary outturn of 6.7 per cent.
Times of Zambia