Zambia Kwacha Currency Rebasing Brochure Barclays
Zambia Kwacha Currency Rebasing Brochure Barclays
Currency Rebasing
Project
Contents
1. Kwacha rebasing - All you need to Know
1.1 What is Currency Rebasing
2. Important Dates
3. New Family of Bank notes and Coins
4. Price Display
4.1 Simultaneous Display of prices
5. Transactions
5.1 Banking Transactions
5.2 Cheque Transactions
Economic Benefits:
It will reduce costs incurred in customizing standard accounting packages since
most of these are developed in countries where values are mostly in millions and
rarely go into billions or trillions.
It will reduce time taken to input accounting information, thus improving accuracy
and reporting times.
It will allow the Central Bank to introduce coins in the high circulating
denominations increasing durability and consequently resulting into savings on
costs usually associated with printing notes.
Rebasing the Zambian Kwacha will increase credibility in the currency and will
result in more confidence from both local and foreign investors.
Smaller digits will be easier to deal with and understand by the public
Social Benefits:
Re-introduction of the culture of using coins in Zambia will encourage technology
transfer from developed nations in areas such as the use of vending machines,
parking meters, etc.
It will give the Central Bank future room to introduce higher value notes in line
with economic growth without having to increase the number of zeros to
extremely large numbers.
It will help the Central bank to review security features on the bank notes hence
curbing cases of counterfeit notes.
1.5 When is the Central Bank going to launch the new bank notes?
The new bank notes will be launched on 1st January 2013. The two currencies,
that is the new and the old currencies, will circulate side-by-side for a period or six
months, while centres will be set up throughout the country to facilitate for the ease of
exchange of the currencies.
1.6 What will be the deadline for financial reporting?
The Bank of Zambia will communicate the end date for Financial and other
institutions to start reporting their financial statements using the new rebased bank
notes as a unit.
1.7 Will the Bank of Zambia educate the public on the use of new bank notes?
The Bank of Zambia will embark on an extensive public education and awareness
campaign to assist all Zambians in understanding issues surrounding rebasing of the
currency.
1.8 How will the old currency be phased out and when will the new currency be introduced?
When the new currency is introduced, it will be allowed to run side by side with
the old currency for a period of six months. This means that when members of the
public deposit or use old currency in banks and other entities in the economy, the
old currency will be withdrawn through commercial banks by the Bank of Zambia. At
this stage, the Bank of Zambia will only issue the new currency to commercial banks.
Should members of the public have old currency in their possession following the
expiry of the exchange period, they will be able to exchange the old currency with the
new at Bank of Zambia or any of its designated agencies. It is only after the adequate
and stipulated period has elapsed that the old currency will be demonetised, in other
words, will become illegal tender.
1.9 Will currency rebasing affect the value of savings?
The process of rebasing of the currency will simply change the amount quoted in
individual accounts, but will not change the value of money or indeed savings. For
example, an individual with K 200, 000 balance in a savings account currently, after
rebasing the balance will reflect as K 200. The value, however, will remain the same.
In addition, if a household was spending K350,000 to buy a basket of goods and
services per month, the household will spend K 350 in the rebased currency to buy
exactly the same amount of goods and services.
1.10 Will the exchange rate be affected by rebasing the currency?
Rebasing the currency will not affect the Kwacha exchange rates. The exchange rates
will simply be divided by 1,000 as illustrated in the example given below:
Date
US Dollar
K 5,000
K 5.00
British Pound
K 7,000
K 7.00
Euro
K 6,000
K 6.00
K 600
K 0.60
Please note that this is an example and does not necessarily reflect the current exchange rates.
2. Important Dates
Date
Occurance
November 30 2012
All systems tested and certified to be ready for adaptation to rebased currency.
December 1 2012
th
st
January 1 2013
st
January 1st
June 30th 2013
Transition period during which both old and rebased currency circulate side by side.
July 1 2013
Old currency ceases to be legal tender, but available for exchange only.
st
June 30 2014
th
EN
EN
SP
EC
IM
IM
EN
SP
EC
IM
EC
IM
EN
SP
EC
IM
EN
SP
EC
SP
SP
EC
IM
EN
SP
EC
IM
EN
SP
EC
IM
EN
SP
EC
IM
EN
SP
EC
IM
EN
To avoid confusion between the old & new currency, features have been designed into
the rebased currency to distinguish it from the old currency.
1 KWACHA
50 NGWEE
10 NGWEE
5 NGWEE
4. Price Display
4.1 Simultaneous Display of prices
During the transition period, from January 1st 2013 to June 30th 2013, the old and
rebased currency will circulate simultaneously.
During period of simultaneous circulation, there will be a gradual substitution of the
old currency by rebased currency in which the banking system will play a vital role.
Dual display of prices will be mandatory during this transition period, January 1st to
June 30th 2013.
During the transition period, from January 1st 2013 to June 30th 2013, an interim
symbol, KR, will be introduced for the purpose of displaying prices.
The symbol KR will be used temporarily during the 6 months transition period after
which KR will cease to be used and only K will be used.
5. Transactions
5.1 Banking Transactions
To accelerate withdrawal of the old currency, commercial banks will make payments in
rebased currency only, but shall receive cash deposits in both old and rebased currency.
All amounts converted from the old currency to the rebased currency shall be rounded
off to two decimal places unless stated otherwise.
For example: K38,568 = K38.57
K38,562 = K38.56
On the 1st of January 2013, all commercial banks shall be required to provide two
separate bank statements to their customers reflecting closing balances in the old
kwacha and the opening balances in the rebased currency. All ATMs will only dispense
rebased money.
All ATMs will only dispense rebased money.
Due to ATM calibration, some ATMs will not be functional just before and after
January 1st 2013.
All amounts shown on receipts from ATMs and POS, shall be expressed in the
rebased currency with the new Currency Code (ZMW).
On the 1st of January 2013, all commercial banks shall be required to provide two
separate bank statements to their customers reflecting closing balances in the old
kwacha and the opening balances in the rebased currency. All ATMs will only dispense
rebased money.
Date
01 DEC 2012
10 DEC 2012
26 DEC 2012
30 DEC 2012
31 DEC 2012
01 JAN 2013
02 JAN 2013
015 3376896
ZMW
015 3376896
02
1
Particulars
SALARY
ACCOUNT NAME:
ACCOUNT TYPE:
CURRENT BALANCE:
AVAILABLE BALANCE:
KYC DATE:
ESTELLA MWANZA
0 CURRENT ACCOUNT
12,000
12,000
02 JAN 2013
Debit
Credit
10,000,000.00
10,000,000.00
Balance
10,000,000.00
CHEQUE No 102
3,000,000.00
7,000,000.00
1,000,000.00
6,000,000.00
CASH WITHDRAWAL
3,000,000.00
DDAC
CASH WITHDRAWAL
SALARY
3,000,000.00
500,000.00
3,500,000.00
10,000.00
12,000.00
1,500.00
2,000.00
The exchange of old notes and coins over the counter will be limited to an amount
of K10million per individual transaction. The commercial banks will still be required to
observe Anti-Money Laundering Directives.
Date:
REBASED CURRENCY EQUIVALENT
NOTES
K50,000
K20,000
K10,000
K5,000
K1,000
K500
K100
K50
K20
Total cash (ZMK)
Name
Address
NOTES
K100
K50
K20
K10
K5
K2
COINS
K1
50n
10n
5n
Telephone
Amount in words
Amount in words
CASHIERS
STAMP
Ref:
BRANCH NO.
ACCOUNT NO.
TRANS. CODE
SIGNATURE..............................................................................................................
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Or