Editing Zambian kwacha (section)

== History ==
Prior to [[Zambia#Independence|independence]] in 1964, the [[Rhodesia and Nyasaland pound]] was the legal tender of the British [[protectorate]] of [[Northern Rhodesia]]. Banknotes of 10 shillings, 1, 5, and 10 pounds issued by the Central Africa Currency Board were in circulation, together with coins of {{frac|1|2}}, 1, 3, 6 pence, and 1, 2, {{frac|2|1|2}}, and 5 shillings. After independence, the [[Bank of Zambia]] issued the first Zambian currency, the [[Zambian pound]], in 1964. The issued paper bills and coins were of similar denominations as these used before independence, except for the 10 pounds note, which was never issued by the Bank of Zambia.<ref>{{Cite web|url=https://colnect.com/en/banknotes/list/country/238-Zambia/series/55808-1964_ND_Issue|title=Zambia : Banknotes [Series: 1964 ND Issue]|website=colnect.com|access-date=December 15, 2019}}</ref> A new design to depict the newly independent country's history and struggle was adopted. The two currencies – the Rhodesia and Nyasaland pound and the Zambian pound, were allowed to circulate in parallel until December 15, 1965, when the South Rhodesian pound bills and coins were withdrawn from circulation, except for the 3 pence coin which was allowed to circulate alongside its Zambian alternative for a brief period.<ref name="auto1">{{Cite web|url=http://www.boz.zm/bankingcurrency_curencyhistory.htm|title=Bank of Zambia – History of the Zambian Currency|access-date=August 16, 2016|archive-date=September 5, 2006|archive-url=https://web.archive.org/web/20060905061339/http://www.boz.zm/bankingcurrency_curencyhistory.htm|url-status=dead}}</ref>

On July 1, 1966, the [[National Assembly (Zambia)|parliament]] approved the arrangements of the decimal currency system (Act 40 of 1966), changing the main currency unit to Kwacha, with one kwacha being equal to 100 ngwee. The [[exchange rate]] was set to one kwacha equivalent to ten Zambian shillings, or one half of a Zambian pound. Thus, by January 16, 1968, all Zambian pound notes and coins were removed from [[Circulation (currency)|circulation]] and replaced by the new kwacha notes, and ngwee coins. The Zambian pound notes of 10 shillings, 1, and 5 pounds were changed into 1, 2 and 10 kwacha respectively, a note of 50 ngwee was issued to replace the old 5 shillings coin, alongside a new note of 20 kwacha.<ref>{{Cite web|url=https://colnect.com/en/banknotes/list/country/238-Zambia/series/55809-1968_ND_Issue|title=Zambia : Banknotes [Series: 1968 ND Issue]|website=colnect.com|access-date=December 15, 2019}}</ref> Ngwee coins with the denominations of 1, 2, 5, 10, and 20 ngwee replacing the existing 1, 3, 6 pence, 1, and 2 shillings coins respectively.<ref>{{Cite web|url=https://colnect.com/en/coins/list/country/238-Zambia/series/164112-1968%7E2012_-_Kwacha_-_Circulation|title=Zambia : Coins [Series: 1968~2012 – Kwacha – Circulation] [1/3]|website=colnect.com}}</ref> The Zambian pound notes, and coins ceased to be a legal tender on January 31, 1974.<ref name="auto1"/>

At the very beginning, the kwacha was pegged to the [[pound sterling]] at a [[Fixed exchange-rate system|fixed rate]] of 1.7094 kwacha per 1 pound. Yet, after the devaluation of the [[United States dollar|US dollar]] on August 15, 1971, Zambia broke all its currency's ties to the British monetary unit, and pegged the kwacha to the American monetary unit. These reforms resulted in a reduction of the kwacha's [[gold standard]] by 7.8%. A few months later, the British [[Chancellor of the Exchequer]] [[Anthony Barber]], announced the demise of the [[Sterling area]], and [[Floating exchange rate|flotation]] of the sterling pound, causing Zambia to renounce the monetary privileges once enjoyed as a member state.

Throughout the years, the Zambian currency suffered high inflation, forcing the Bank of Zambia to introduce high value denominations in 2003, including 20,000 bills to facilitate transactions. In 2013, a new, [[Redenomination|redenominated]] kwacha was introduced.<ref name="auto1" /> The value of Zambian currency dropped following redenomination; the exchange rate was 22 kwacha to one U.S. dollar in April 2021. After the [[2021 Zambian general election]] saw a defeat for [[Edgar Lungu]], the currency's depreciation was reversed; {{as of|2021|8|27|lc=y}} one U.S. dollar was exchanged for about 16 kwacha.<ref>{{Cite web|title=XE: USD / ZMW Currency Chart. US Dollar to Zambian Kwacha Rates|url=https://www.xe.com/currencycharts/?from=USD&to=ZMW&view=1Y|access-date=August 27, 2021|website=www.xe.com}}</ref> Since the inauguration of president Hakainde Hichilema in 2021, the kwacha has enjoyed a steady exchange rate hovering around 17 to 19 per one U.S. dollar well into the year 2023, however following the drought, reduced economic activity and up to 15 hours of load-shedding to name a few current issues the economy has stagnated and the kwacha has since depreciated to an all time high of one U.S. dollar per 27 Zambian kwacha.<ref>{{Cite web |title=1 USD to ZMW - US Dollars to Zambian Kwacha Exchange Rate |url=https://www.xe.com/currencyconverter/convert/?Amount=1&From=USD&To=ZMW |access-date=2024-06-07 |website=www.xe.com}}</ref>