Regulatory Alerts2013-01-01
Introduction of Foreign Exchange Swaps as Instruments of Monetary Policy
The Bank of Zambia introduced foreign exchange swaps as an additional monetary policy instrument under Open Market Operations to enhance liquidity management in money markets. This measure, effective immediately, aims to expand the central bank's toolkit for nurturing domestic financial markets and improving policy efficacy. The specific rules and procedures governing these swaps are detailed in forthcoming OMO Guidelines.
BANX. of ZAMBIA OFFICE OF THE DEPUTY GOVERNOR - OPERATIONS July 25, 2013 CB Circular No: 15/2013 To All Heads of Commercial Banks INTRODUCTION OF FOREIGN EXCHANGE SWAPS AS INSTRUMENTS OF MONETARY POLICY In our continued effort of enhancing the efficacy of our monetary policy operations as well as nurturing our domestic financial markets, the Bank of Zambia wishes to announce the introduction of foreign exchange swaps (FX swaps) as an additional instrument of monetary policy under our Open Market Operations (OMO). The primary purpose of introducing the FX swaps is to increase the number of instruments in the toolkit available to the Central Bank to assist improve the liquidity management effort in the money markets. Kindly note that the introduction of FX swaps is with immediate effect. We wish to advise that the rules and procedures governing FX swaps are contained in the OMO Guidelines which will be issued soon. /: Bw Iya K. E. Ng'andu (Dr) DE UTY GOVERNOR - OPERATIONS Bank Square, Cairo Road P.O. Box 30080, Lusaka, Zambia Tel: 260-211-226844,228888 Fax:260-211-237070 E-mail: bngandu@boz.zm. bttp:/Iwww.boz.com