RegAlert2024-02-12
Added · Updated
Changes to Operating Rules and Guidelines for the Overnight Lending Facility
The Bank of Zambia has amended its Overnight Lending Facility guidelines to immediately accept government bonds as eligible collateral for the Intra-day Liquidity Facility. The circular also establishes a thirty-day limit for overnight loan extensions, after which unpaid transactions are classified as defaults and the underlying securities remain locked. Commercial banks must continue to clear outstanding overnight facility loans before applying for or requesting new extensions.
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[Logo: Bank of Zambia]
Bank of Zambia
OFFICE OF THE DEPUTY GOVERNOR - OPERATIONS
BOZ/EXE/DGO/fmkts/bp
February 12, 2024
CB Circular No. : 03/2024
To : All Heads of Commercial Banks
CHANGES TO OPERATING RULES AND GUIDELINES FOR THE OVERNIGHT LENDING FACILITY
Reference is made to the Operating Rules and Guidelines for the Overnight Lending Facility (OLF) (2018).
The Bank of Zambia (BoZ) wishes to advise that Section 4.2 of the OLF Guidelines has been amended to include Government bonds as eligible collateral for the Intra-day Liquidity Facility (ILF) with immediate effect.
Commercial banks are further advised that, in line with Section 7.3 of the OLF Guidelines, the BoZ has set the number of overnight loan extensions to 30 days. This means that after this period, the unpaid extended OLF transaction shall be treated as default and the repoed securities shall not be released. As is currently the standard, banks are still expected to clear an outstanding OLF loan before applying or requesting for another.
[Signature]
Francis Chipimo (PhD)
DEPUTY GOVERNOR – OPERATIONS
cc Governor
Bank Square, Cairo Road, P.O. Box 30080, Lusaka, Zambia Tel:+260-211-399303, 399300, E-mail: dgo@boz.zm, Web: http://www.boz.zm
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Source: Bank of Zambia — original document · Summary generated with machine assistance and reviewed before publication; the authoritative text is the regulator's original document. How RegAlert works
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