Regulatory Alerts2014-01-01
Bank of Zambia Revision to the Interbank Forex Market Framework
The Bank of Zambia has revised its Interbank Foreign Exchange Market framework to moderate exchange rate volatility and improve market orderliness. Commercial banks must now apply a two-way quote marketable amount ranging from US$0.5 million to US$1.0 million and a maximum Bid/Ask spread of K0.02. These measures take immediate effect and will be periodically reviewed by the central bank based on prevailing market conditions.
BANK O/ZAMBIA OFFICE OF THE DEPUTY GOVERNOR - ADMINISTRATION 28 March, 2014 CB Circular No: 11/2014 TO All Heads of Commercial Banks REVISION TO THE INTERBANK FOREIGN EXCHANGE MARKET (IFEM) FRAMEWORK Reference is made to CB Circular No. 21/2013, dated 16 December 2013, in which we advised the change in the marketable threshold to US$1.0 million and the Bid/Ask spread to KO.01. Kindly be advised that in an effort to moderate exchange rate volatility and bring orderliness to the foreign exchange market, the Bank of Zambia wishes to advise that the following changes have been made to the Interbank Foreign Exchange Market (IFEM).
- The marketable amount for the two-way quote has been revised to a range of US$0.5 million - US$1.0 million from the current US$1.0 million.
- The Bid/Ask Spread has been increased to a maximum of KO.02 from KO.01 in order to ) enhance price discovery. These measures are with immediate effect. Please note that, the Bank of Zambia will review these measures depending on market conditions. ~ Dr Tukiya Kankasa-Mabula DEPUTY GOVERNOR - ADMINISTRATION Cc Governor Bank Square. Cairo Road, P.O. Box 30080, Lusaka, Zambia. Tel: +260-211-229930 Fax: +260-211-222808 E-mail: tkmabula@boz.zm. Web: http://www.boz.zm