Regulatory Alerts2024-09-01
On the Foreign Exchange Position of Banks
The Bank of the Republic of Burundi issued Circular No. 18/2018 to cap banks' overall net foreign exchange positions at 25% of core own funds, ensuring potential currency fluctuation losses remain within prudential standards. The regulation mandates that end-of-day excesses in long positions be sold and short position deficits be covered through foreign exchange market purchases within one to two business days. Banks maintain the discretion to set individual currency limits, provided their aggregate exposure adheres to these overarching prudential thresholds.
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