Regulatory Alerts2017-01-01
Adjustments to the Statutory Reserve Ratio and the Overnight Lending Facility Rate
The Bank of Zambia has reduced the Overnight Lending Facility rate by 0.75 percentage points to 16.25 percent, effective immediately following a policy rate change. The statutory reserve ratio on local and foreign currency deposits, including government and vostro accounts, has been lowered by 1.50 percentage points to 8.0 percent, taking effect on November 27, 2017. These adjustments aim to reduce the cost of funds for commercial banks and stimulate broader credit growth across the Zambian economy.
[Logo: Bank of Zambia]
Bank of Zambia OFFICE OF THE DEPUTY GOVERNOR - OPERATIONS
BOZ/EXEC/DGO/fmkts/bp
November 22, 2017
CB Circular No. : 09/2017
To : All Heads of Commercial Banks
ADJUSTMENTS TO THE OVERNIGHT LENDING FACILITY RATE AND THE STATUTORY RESERVE RATIO
Reference is made to CB Circular No. 05/2017 dated August 10, 2017.
Commercial banks are hereby advised of the following changes regarding the Overnight Lending Facility (OLF) rate and the statutory reserve ratio:
Overnight Lending Facility Rate
With immediate effect, the OLF rate has been reduced by 0.75 percentage points to 16.25 percent from 17.00 percent following the change in the Bank of Zambia Policy Rate.
Statutory Reserve Ratio
Similarly, the statutory reserve ratio on both local and foreign currency deposits including Government deposits and vostro account deposits has been reduced by 1.50 percentage points to 8.00 percent from 9.50 percent. This change will take effect on Monday, November 27, 2017.
These measures are aimed at reducing the cost of funds and promoting credit growth in the economy.
The Bank of Zambia will continue to monitor developments in the macroeconomic environment and stands ready to take appropriate measures as and when deemed necessary.
[Signature]
Bwalya K. E. Ng'andu (Dr) DEPUTY GOVERNOR – OPERATIONS
Cc Governor Deputy Governor – Operations
Bank Square, Cairo Road P .O. Box 30080, Lusaka, Zambia Tel: 260-211-226844, 228888 Fax:260-211-237070 E-mail:dgo@boz.zm.Web: http://www.boz.zm