Local News

BoZ acts to boost economy

By BENNIE MUNDANDO
THE Bank of Zambia (BoZ) has pumped in a K10 billion medium-term refinancing facility to provide medium term liquidity which will be reviewed as conditions warrant.
This is one of the comprehensive measures to safeguard financial system stability, promote the greater use of digital financial services and mitigate the negative effects of this shock on the economy in the wake of the Covid-19 which is ravaging the whole world.
BoZ Governor Denny Kalyalya yesterday said this was a three to five years facility that will be available to eligible Financial Service Providers (FSPs) to enable them restructure or refinance qualifying facilities or lend to eligible clients.
Dr. Kalyalya said detailed implementation guidelines will be rolled out as soon as the on-going discussions with the Bankers Association of Zambia are concluded.
He said although the full impact of the Covid -19 shock on public health and the economy could not be determined at the moment, indications were that it will be unprecedented.
He also said the central bank had scaled up open market operations to provide short-term liquidity support to commercial banks on more flexible terms than those obtaining before the outbreak of Covid-19.
He said they have also revised rules governing the operations of the interbank foreign exchange market to support its smooth functioning, strengthen market discipline and provide a mechanism for addressing heightened volatility in the exchange rate in periods of stress.
“The bank has also extended the transitional arrangement provided for under CB Circular No. 11/2017, wherein FSPs were granted a three-year transitional period from 2018 to 2020 to amortise the ‘Day 1 Impact of the IFRS 9’ for capital adequacy purposes, for a further two-year period up to 31st December 2022 on account of Covid- 19,” he said. He said the bank has also implemented business continuity protocols that will ensure that systemically important payment systems and financial market infrastructures remain available.
He said other monetary policy tools available will remain options that may be deployed should conditions so warrant, consistent with the Bank of Zambia forward-looking monetary policy framework.

Related Articles

Back to top button

Adblock Detected

Please consider supporting us by disabling your ad blocker