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we are hopeful that within the coming month, we will see an increase in the levels of flows from the mining companies to counteract the demand side of the equation,” Dr Ng’andu said.
The local currency is currently trading at KR5,40 per US dollar, the lowest it has gone in months since its rebasing. And Dr Ng’andu said it was wrong for some sections of society to say that the government was trying to reintroduce foreign exchange controls.
He explained that the central bank was merely putting in place administrative measures to deal with some of the leakages in the foreign exchange system.
“There are no controls; it’s just administrative measures that are intended to deal with some of the leakages that are in the foreign exchange system. By this week, we should be able to see a statutory instrument that will contain the specifics,” Dr Ng’andu said in an interview.
“To refer to them as foreign exchange controls is wrong; we are not introducing them, we are merely taking certain specific measures to deal with the leakages.”
And Dr Ng’andu said the central bank had withdrawn 86 percent of the old currency (K3,3 trillion) from circulation. He said the central bank would not manage to collect all the old currency as there were people that were used to hoarding.
“We have withdrawn about 86 percent of the total amount we released into circulation. We have taken out about K3,3 trillion. Considering that we have taken out 86 percent now, I am sure by the end of next month we will probably be somewhere close to 90 percent and I am reasonably comfortable that by the end of June, we should have taken out close to 98 percent,” Dr Ng’andu said.
“But we won’t take out 100 percent, because people still have their moneys stuck in their pillows and mattresses and some of it buried.”
On the Cheque Truncation System, Dr Ng’andu said there were some hitches but assured that they would be dealt with within a few months.
“There is a bit of a hiccup in the system. We were supposed to have a system working in August last year, but because of the rebasing, we delayed that a little bit. So it’’s an issue of bringing equipment and machinery to speed. But most of the banks are in a position to meet the requirements of the truncation but it’’s not a serious problem,” he said.
And director banking and payment systems Fabian Hara said the few problems that had been experienced were to do with the processing systems in commercial banks. — The Times.
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