The Bank of Zambia has advised business houses pricing locally traded goods and services in foreign currencies, especially the US Dollar, to stop the practice.
Head of Communications Division, Kanguya Mayondi in a statement to QFM says this practice is undermining the macroeconomic stabilization efforts that are being undertaken.
Mr Mayondi says macroeconomic conditions do not warrant pricing in foreign currency for domestic transactions, considering that the country’s inflation remains stable and has been declining during the year.
He explains that the pricing in foreign currencies reduces the price incentive of a depreciation in encouraging businesses to engage in the export or production of goods that are currently imported.
Mr Mayondi adds that pricing in foreign currency implies that businesses are adjusting their prices to reflect the extent of the movements in the exchange rate and yet most of their operating costs are not in foreign currency.
He further states that the adverse effects of pricing and paying in foreign currencies are mainly felt by the general public rather than business houses as the former has no ready means of hedging against currency depreciation.
Mr Mayondi has since urged pubic to bring to the attention of the Bank of Zambia any entity engaged in such practices.
He notes that measures to stabilize the economy will only bear the expected results, if all players in the economy cooperate and work towards that goal.