Regulatory Alerts2002-01-01
Bank of Zambia Circular 09/2002 Foreign Exchange Rates
The Bank of Zambia has immediately withdrawn Circular 6/2002, which previously restricted commercial banks' foreign exchange trading margins. This reversal follows the regulator's observation that bank margins have naturally narrowed to levels consistent with a stable and competitive Kwacha exchange market. The central bank will continue monitoring foreign exchange developments to preserve market integrity and the stability of its dealing window auction system.
# BANK OF ZAMBIA
## OFFICE OF THE DEPUTY GOVERNOR - OPERATIONS
6 May 2002
CB Circular No. 9/2002
TO : ALL COMMERCIAL BANKS
## FOREIGN EXCHANGE RATES (CIRCULAR 6/2002)
Following the issuance of CB Circular 6/2002, the Bank of Zambia (BoZ) has observed that commercial banks margins on foreign exchange transactions have narrowed within limits deemed to be consistent with a stable and competitive foreign exchange market.
Following this positive development, the BoZ is with immediate effect, withdrawing CB Circular 6/2002. This circular was implemented with the main objective of promoting a stable and competitive Kwacha exchange rate following the emergence of speculative margins commercial banks were applying in their foreign exchange transactions. The intervention was further aimed at maintaining the integrity of the BoZ dealing window auction system.
The BoZ will continue to observe developments in the foreign exchange market with a view to maintaining a stable and competitive Kwacha exchange rate and integrity of the BoZ dealing window.
*Mwenda*
Dr Abraham Mwenda
DEPUTY GOVERNOR – OPERATIONS
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Bank Square, Cairo Road, PO Box 30080, Lusaka 10101, Zambia Tel: 260-1-226844, Fax: 260-1-237070, email: amwenda@boz.zm
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