Regulatory Alerts2006-01-01
Bank of Zambia Core Liquid Assets Ratio (CB Circular 04/2006)
The Bank of Zambia mandates a reduction in the core liquid assets ratio for all commercial banks from 35% to 9% of total public liabilities, effective July 1, 2006. The circular also excludes government securities with original maturities exceeding 182 days from eligible assets. This regulatory adjustment aims to provide commercial banks with greater balance sheet flexibility while lowering the cost of funds for the private sector to stimulate economic growth.
# BANK OF ZAMBIA
OFFICE OF THE DEPUTY GOVERNOR - OPERATIONS
June 16, 2006
CB Circular No: 04/2006
TO : All Commercial Banks
## CORE LIQUID ASSETS RATIO
Reference is made to our CB Circular 10/2001 of February 27, 2001.
Notice is hereby given to all commercial banks that effective July 1, 2006, the core liquid assets ratio will be 9% of commercial banks’ total liabilities to the public, instead of the current 35%. In addition, eligible assets will exclude Government securities with an original term to maturity in excess of 182 days.
The reduction in the core liquid assets ratio is intended to allow commercial banks greater and essential flexibility in managing their balance sheets. In addition, it is expected that this will trigger a reduction in the cost of funds to the private sector so as to support economic growth.
Denny H Kalyalya (Dr)
DEPUTY GOVERNOR – OPERATIONS
Cc: Governor
Bank Square, Cairo Road P. O. Box 30080, Lusaka, Zambia Tel: +260 -1-226844 Fax: +260-1-237070 Email: dkalyaly@boz.zm Web: http://www.boz.zm/
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