Why Russia wants Zambia to trade in local currencies instead of the US dollar
Russia has proposed that Zambia conduct more of its bilateral trade using the Kwacha and the Ruble, instead of relying on the US dollar, as both countries look to continue economic ties and reduce exposure to global currency pressures.
The proposal comes following global shifts, with some countries seeking alternatives to dollar-dominated trade systems in response to geopolitical tensions, currency volatility and tighter access to hard currency.
Russian officials see local-currency trade as a way to strengthen cooperation with Zambia in sectors such as mining, energy, agriculture and infrastructure, while lowering transaction costs and reducing demand for US dollars, Lusaka Times reports.
Supporters of the idea say settling trade in domestic currencies could ease pressure on Zambia’s foreign exchange reserves, especially during periods of limited dollar liquidity.
However, economists and financial institutions have urged caution. They warn that local-currency trade requires strong financial systems, stable exchange-rate mechanisms and clear settlement frameworks to manage risks linked to currency fluctuations.
Zambia’s economy remains closely tied to dollar-based pricing, particularly because its main export, copper, is traded on global markets in US dollars. Government officials have said any move toward local-currency trade would be guided by economic prudence, regulatory readiness and consultations with banks and businesses.
This story is written and edited by the Global South World team, you can contact us here.
