Adjustments to the Statutory Reserve Ratio and the Overnight Lending Facility Rate

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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