Bank of Zambia

Currency Rebasing
Project

Registered Commercial Bank

Contents
1. Kwacha rebasing - All you need to Know

1.1 What is Currency Rebasing

1.2 Why Rebase the Currency

1.3 Will rebasing cause inflation?
1.4 What are the benefits of rebasing the Kwacha?
1.5 When is the Central Bank going to launch the new bank notes?
1.6 What will be the deadline for financial reporting?
1.7 Will the Bank of Zambia educate the public on the use of new bank notes?
1.8 How will the old currency be phased out and when will the new
Currency be introduced?
1.9 Will currency rebasing affect the value of savings?
1.10 Will the exchange rate be affected by rebasing the currency?

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

5.3 Cheque Clearing

5.4 Issuance of Post-dated cheques
5.5 Banking Statements

6. Making a Deposit at Barclays Bank

6.1 Over the Counter Limits
7. Availability of Rebased Tariff Guide
8. Further information

Bank of Zambia Currency Rebasing Project I 1

1. Kwacha rebasing - All you need to Know

On 23rd January, 2012, the Government of the Republic of
Zambia approved the recommendation by the Bank of Zambia
to rebase the Zambian Kwacha. During the period prior to the
launch, the Bank of Zambia will provide information to ensure
that the public understands what this process will entail. In this
publication, we provide answers to some pertinent questions
that members of the public have been asking and welcome any
contributions that the public may have.
1.1 What is Currency Rebasing?
Currency Rebasing involves dividing a currency unit by some denominator. In this
case the Zambian currency will be rebased by dividing the existing bank notes by 1000
hence dropping off 3 zeros from the existing K50,000, K20,000, K10,000, K5000 and
K1000. The lower value denominations that include the K500, K100, K50 will be divided
by 1000 and converted into coins while the existing K20 banknote will not be converted
into a coin due to its eroded purchasing power. Thus it will be eventually removed from
circulation.
1.2 Why rebase the currency?
The decision to rebase the national currency has arisen from the need to address
costs associated with an accumulated loss in value of the national currency arising
from years of high inflation that characterized the Zambian economy in the late 1900s
and early parts of the 2000s. Such high levels of inflation at that time resulted in
inconvenience and risks involved in carrying large quantities of money for relatively low
value transactions. This then prompted the Bank of Zambia to introduce high value
denominations in 2003 which included the K20, 000 and the K50, 000 denominations,
to facilitate transactions. In recent times, the economy has stabilized and it has been
decided that this is the right time to rebase the currency.
1.3 Will rebasing cause inflation?
No inflationary effect arising directly from rebasing is expected as the operation is
basically a zero removal process with the quantity of currency in circulation in terms of
pieces remaining the same. In other words, one K50, 000 banknote for instance, will
be replaced by one K50 rebased banknote. The value in terms of the purchasing power
of the K50,000 and the new K50 will be the same hence will buy the same goods and
services without increasing the prices.
1.4 What are the benefits of rebasing the Kwacha?
The benefits of rebasing the Kwacha can be divided into Economic and social benefits
as shown on the next page.

2 I Bank of Zambia Currency Project

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

Bank of Zambia Currency Rebasing Project I 3

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

Example of Exchange Rate

Example of Rebased Exchange Rate

US Dollar

K 5,000

K 5.00

British Pound

K 7,000

K 7.00

Euro

K 6,000

K 6.00

South African Rand

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

January 23rd 2012

Finance Minister Announces start of Rebasing Exercise.

November 30 2012

All systems tested and certified to be ready for adaptation to rebased currency.

December 1 2012

Voluntary Display of Double Prices Commences.

th

st

January 1 2013

Rebased currency becomes legal tender.

January 1st 2013

Mandatory display of double prices commences.

st

June 30th 2013

Display of double prices comes to an end.

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

Exchange of old currency for rebased currency ceases at commercial banks.

July 1st 2014

December 31st 2015

Exchange takes place at BOZ only and designated agents.

December 31st 2015

End of currency exchange of at both BOZ & Designated agents.

th

4 I Bank of Zambia Currency Rebasing Project

3. New family of bank notes & coins

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.

Bank of Zambia Currency Rebasing Project I 5

3.1 New family of coins

1 KWACHA

50 NGWEE

10 NGWEE

5 NGWEE

6 I Bank of Zambia Currency Rebasing Project

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.

Bank of Zambia Currency Rebasing Project I 7

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).

5.2 Cheque Transactions

During the transition period of the currency rebasing exercise (1st January to 30th
June 2013), the current Cheques would be used and the reference point would be
the date of issue on the Cheque. In addition, special care shall have to be taken when
issuing cheques to ensure that the amounts are expressed in the rebased currency.
This will also help prevent cheque processing errors. The following issues should be
taken into account when issuing and processing cheques:
All cheques issued before 1st January 2013 will be in the old currency. All cheques
issued before this date but only presented for payment after 1st January 2013 will
be paid with the amount divided by 1,000.
Cheques dated 1st January 2013 and after, shall be assumed to have been issued in
rebased currency and would be paid on face value.
The Cheque Item Value Limit (IVL) would be restated to K100, 000 from K100million
and any Cheque whose value exceeds IVL would be returned with the notation

Exceeds Item Value Limit.
Banks in conjunction with Bankers Association of Zambia and other financial

institutions shall be obliged to inform their clients, through the most convenient and
suitable means, regarding the rules applicable to the payment of cheques during
the transition phase.

8 I Bank of Zambia Currency Rebasing Project

5.3 Cheque Clearing

During the transition phase, commercial banks will be required to prepare
consolidated files for clearing purposes. Cheques denominated in the old currency will
be divided by 1,000 and added to those of the rebased currency and thereafter sent to
Zambia Electronic Clearing House Limited.
Any rounding off differences will be for the collecting banks accounts.

5.4 Issuance of Post-dated cheques

In order to facilitate a smooth transition, all stakeholders are advised to desist from
issuing post-dated cheque, as those issued with a date beyond 31st December 2012
will be assumed to have been issued after 1st January 2013 and will therefore be
expressed in the rebased currency.
As such, a cheque issued in the old currency prior to 31st December 2012 but postdated to a date after and including 1st January 2013, will be regarded by commercial
banks as having been issued in the rebased currency.
The Bankers Association of Zambia has therefore advised that any customers, who
may have already issued cheques that are postdated beyond 31st December 2012, are
advised to contact the payee and make alternative payment arrangements to avoid loss
of value.

5.5 Bank Statements

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.

Example of a Bank Satement during the transition period

ACCOUNT No:
CURRENCY:
ACCOUNT No:
RISK LEVEL:
KYC INDICATOR:

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

ATM CASH WITHDRAWAL

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

Bank of Zambia Currency Rebasing Project I 9

6. Making a Deposit at Barclays Bank

6.1 Over the Counter Limits

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.

CONVERSION DEPOSIT SLIP

OLD CURRENCY

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

Total cash (ZMW)

Ref:
BRANCH NO.

ACCOUNT NO.

TRANS. CODE

SIGNATURE..............................................................................................................

(This is for conversion of old currency to new currency only.)

PAID IN BY

7. Rebased Tariff Guide will be available on 1st January 2013 from

your nearest branch.
8. For further Information Contact
Public Relations Division
Bank of Zambia
P. O. Box 30080 Lusaka
Tel: +260 211 228888
Email: rebasing@boz.zm
website: www.boz.zm

Or

10 I Bank of Zambia Currency Rebasing Project

Call Barclays Bank Zambia Plc

on 5950 (free on MTN and Airtel)
normal call rates apply on Zamtel
or email us at:
customerservice.zambia@barclays.com

Barclays Bank Plc Head Office

Elunda Office Park
Plot No 4643 & 4644
Addis Ababa Round About
Rhodespark
P.O. Box 31936
Lusaka
Tel: +(260) (211) 366150
/ 165 / 222205 Direct
Fax: +(260) (211) 222211