WHILE South Africans get used to the new banknote series, with the Big Five moved to the back of the notes, Zambia is preparing to remove three zeros from its money.The Bank of Zambia has announced that the kwacha will be rebased by dividing it by 1,000, dropping three zeros off the currency, on January 1.Zimbabwe’s regular and drastic currency rebasing a few years ago might have created the impression that dropping zeros is a desperate and cosmetic exercise, but analysts say it is often necessary to rebase a currency, ideally when an economy is stable and growing.“Currency rebasing is usually implemented when there is a need to address costs associated with an accumulated loss in value of the currency that undermines its basic function as a store of value, medium of exchange and measure of value,” said Janine Botha, economist at NKC Independent Economists.The Bank of Zambia said high kwacha denominations were the result of high inflation for a long time. Zambia had very high inflat...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.