THE Bankers Association of Zambia (BAZ) is lobbying regulators to put in place a law that will deter businesses from quoting in United States (US) dollars as the tendency increases transaction costs.
BAZ vice chairperson Mizinga Melu said dollarisation is also a serious issue since it increases costs of doing business in Zambia.
“Dollarisation is an issue because quoting in dollars translates in cost of doing business…We are lobbying the regulators to put a law to stop quoting in dollars,” she said.
Mrs Melu, who is also Standard Chartered Bank managing director, was answering a question on what the financial market was doing on dollarisation during the bank’s second quarter performance media briefing in Lusaka yesterday.
Recently, the Bank of Zambia (BoZ) conducted a survey whose findings were outlined in a publication entitled ‘Issues on the Zambian Economy’.
The findings noted that the Zambian economy has been highly dollarised.
BoZ recommended the introduction of measures to cushion commercial banks from some of the effects of dollarisation.
According to the study findings, the major contributing factor to dollarisation is volatility in the exchange rates and the high levels of inflation.
The study also found that dollarisation has also arisen due to uncertainty about donor inflows and balance of payment support.
Mrs Melu, however, said there is need to develop infrastructure as it has been identified as a major contributing factor to the cost of doing business.
“The cost of doing business remains high.
It is important to continue to develop infrastructure, hence diversification in other sectors thereby create jobs.”
On the recent fraud activities that affected some banks, Mrs Melu said although confidence has been affected, the players in the market remain vigilant and those affected were reimbursed.
“Although it was a very small quantity of people affected in our market compared to other markets, it is not acceptable but not unusual. We remain vigilant as a bank,” she said.
Recently, BAZ issued a notice advising customers to be watchful when using debit cards especially abroad.
[Zambia Daily Mail]