Regulatory Alerts2001-01-01
Bank of Zambia Circular 06/2001 on Foreign Exchange Risk Exposures
The Bank of Zambia has reduced the maximum allowable foreign exchange exposure limit for commercial banks and financial institutions from 25% to 15% of regulatory capital, effective January 23, 2001. Institutions must maintain daily records of single-currency and overall FX positions, submit weekly returns to the Financial System Supervision Department, and utilize a five-day grace period to rectify any excesses. Uncured exposures exceeding the new limit after the grace period will incur daily penalties equal to 10% of the excess amount, while persistent non-compliance may trigger additional regulatory sanctions or trading prohibitions.
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