PostDotNet, official agents of Western Union, say the depreciation of the kwacha is compounding clients’ ability to transact.
The kwacha has continued to trade on the back foot as dollar liquidity remains limited, with the local unit trading at K11.10 per dollar, having failed to post any significant gains during the industrial break.
PostDotNet executive chairman, Cuthbert Malindi, said the weak kwacha is posing challenges to clients that need to send money abroad as the amounts of local currency required are much higher.
He also noted that the Bank of Zambia’s foreign currency transaction limits of US $1,000 for individuals has meant clients don’t actually send the full desired amounts to recipients abroad.
“Within the Republic, there is no problem; it is really sending outside because as the kwacha devalues then you are sending less money and obviously clients don’t like that.
Also, there is a BoZ transaction limit pegged at US $1,000 but sometimes when you convert kwacha to dollars, you find that you don’t quite send the US $1,000; it is less than that,” Malindi said in an interview.
“We have had clients complaining about that because some clients want to send an exact amount of US $1,000 but because the way the limit has been set, they can only send maybe US $950 or thereabout.”
He, however, said the transaction activity during the festive period was high.
“When we had that liquidity crunch in September, October, we were all caught by surprise. We certainly didn’t see that for December. With the devaluation of the kwacha, the transaction value is high so one would expect that the activity will be high because of that,” said Malindi.
PostDotNet is a privately-owned Bank of Zambia designated payment system company that has been in operation for more than 10 years.