Regulatory Alerts2024-01-01
CB Circular No. 02 of 2024 – Adjustment to the Kwacha and Foreign Statutory Reserve Ratio
The Bank of Zambia has increased the minimum statutory reserve ratio for commercial banks by nine percentage points to 26.0 percent, effective February 5, 2024. This adjustment applies to both local and foreign currency deposits, including government and vostro accounts, and is calculated based on the Weekly Return of Selected Assets and Liabilities as of January 31, 2024. The rate hike addresses persistently high foreign exchange market demand pressures that are driving inflation, with the central bank reserving the right to implement further stabilization measures as needed.
[Logo: Bank of Zambia]
Bank of Zambia OFFICE OF THE DEPUTY GOVERNOR - OPERATIONS
BOZ/EXEC/DGO/fmkts/ns
February 2, 2024
CB Circular No. : 02/2024
To : All Heads of Commercial Banks
ADJUSTMENT TO THE KWACHA AND FOREIGN CURRENCY STATUTORY RESERVE RATIO
Reference is made to CB Circular No. 31/2023 dated November 21, 2023.
The Bank of Zambia wishes to advise all commercial banks that with effect from Monday, February 05, 2024, the minimum statutory reserve ratio on both local and foreign currency deposits, including Government deposits and vostro accounts deposits, will be increased by 9 percentage points to 26.0 percent from 17.0 percent.
In terms of compliance, the revised statutory reserve ratio of 26.0 percent will be based on the Weekly Return of Selected Assets and Liabilities as of Wednesday, January 31, 2024.
This increase in the statutory reserve ratio is necessitated by persistently high demand pressures in the foreign exchange market which are contributing to higher inflation. The Bank of Zambia will continue to closely monitor developments in the macroeconomic environment in general and in the financial markets in particular and stands ready to take further measures should they be deemed necessary, in line with its mandate of maintaining price and financial stability.
[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