Regulatory Alerts2001-01-01
Bank of Zambia Circular 04/2001: Statutory Reserve Ratio
The Bank of Zambia has increased the minimum statutory reserve ratio for commercial banks by four percentage points to 15 percent, a requirement that also applies to foreign currency deposits. Effective January 22, 2001, following a standard ten-day transition period, this adjustment aims to counter ongoing macroeconomic instability driven by rapid money supply growth and Kwacha depreciation. Future modifications to reserve requirements will remain contingent upon prevailing macroeconomic stability conditions.
Tel. 228888 / 228903 - 20
BANK OF ZAMBIA
P.O. Box 30080,
LUSAKA 10101
12 January 2001
CB Circular No. 04/2001
To: All Commercial Banks
Dear Sirs/Madam
# STATUTORY RESERVE RATIO
Kindly refer to circular No. SCH/CB/10/2000 dated 11<sup>th</sup> December 2000.
Commercial banks are hereby advised that the minimum statutory reserve ratio has been revised upwards by 4 percentage points to 15%. As before, this adjustment also applies to the foreign currency deposits.
In keeping with the standard ten days transition period, the new statutory reserve ratio of 15% will become effective on Monday, January 22, 2001.
This adjustment has been necessitated by the need for the Bank of Zambia to further address the continued instability in the macroeconomic environment, particularly with respect to growth in money supply and rapid depreciation of the Kwacha.
As usual, further adjustments to the reserve ratio requirements will depend on the situation regarding macroeconomic stability.
Yours faithfully
Dr. Abraham Mwenda
DEPUTY GOVERNOR - OPERATIONS
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