Zambia’s central bank will increase the daily limit for foreign currency exchange transactions, it announced on Thursday, as part of an effort to draw transactions into official channels and reduce complication for businesses.

Commercial bank customers will be allowed to exchange $10,000 per day, increased from $5,000. Customers at retail foreign exchange bureaus will be permitted to exchange up to $5,000, raised from $1,000, Central Bank Governor Christopher Mvunga said.

“This will allow for a regulated, systematic market where people can transact within the formal channels,” Mvunga said of the measures, which will take effect on June 1.

The central bank said in a separate statement foreign exchange bureaus which currently source up to $100,000 per day from commercial banks would be limited to $20,000 per day starting next month.

The rationale for the revision is that foreign exchange bureaus should now be able to source foreign exchange from their customers who would be permitted to exchange $5,000 per day, the central bank said.

The limits were introduced 20 years ago, and the central bank had recognised that they were inconveniencing businesses and forcing people to buy hard currency on the black market.

The central bank said in a circular dated May 24 that it would observe the new over-the-counter foreign currency limits for a period of two months, subject to further review.

(Reporting by Chris Mfula Editing by Promit Mukherjee and Peter Graff/Mark Heinrich)