Regulatory Alerts2001-01-01
Bank of Zambia Circular 14/2001 on Foreign Exchange Risk Exposures, Placements and Transactions
The Bank of Zambia issued Circular 14/2001 to tighten foreign exchange risk management by reducing overnight overall and single-currency exposure limits to 15% and 10% of regulatory capital, respectively. Financial institutions must adhere to strict placement limits based on counterparty credit ratings, maintain daily risk records, submit weekly Monday reports signed by executive officers, and immediately notify the central bank of any limit breaches. Non-compliance triggers a 10% daily penalty on excess amounts, with a grace period granted until May 2, 2001 for existing placements to adjust, while the previous 25% cap on foreign currency demand deposits is officially removed.
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