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BOZ REVIEWS RELIEF PACKAGE TERMS

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  • The Central Bank in April this year set up a K10 billion TMTRF meant to assist businesses and households survive the challenges cause by the Covid-19 pandemic through affordable financing.

By BUUMBA CHIMBULU
THE Bank of Zambia (BoZ) is reviewing the terms and conditions to enhance uptake of the Targeted Medium-Term Refinancing Facility (TMTRF), as it disburses K3.1 billion under the package.

The Central Bank in April this year set up a K10 billion TMTRF meant to assist businesses and households survive the challenges cause by the Covid-19 pandemic through affordable financing.
The funds are being channelled through Financial Service Providers (FSPs).
Under the facility, BoZ is providing liquidity to eligible FSPs for onward lending to viable businesses, says BoZ Governor, Christopher Mvunga.
As at November 12, this year, he said, a total of K3.1 billion had been disbursed.
Mr Mvunga however said the Central Bank was making revisions to the terms and conditions to enhance accessibility.
He was speaking on Friday evening at the 2020 Economics Association of Zambia (EAZ) and business gala under the theme: “Building a Resilient Economy Post Covid-19.”
“Additional incentives have been given to identify priority sectors with a view to stimulating private sector led growth,” Mr Mvunga said.
He said this was part of the accommodative monetary policy stance since the onset of Covid-19.
This, he explained, was to support livelihoods and safeguard the stability of the financial sector while being mindful of the need to bring back inflation to the six to eight percent target range in the medium-term.
“The Bank’s response primarily focused on easing financial stress, ensuring a smooth flow of credit to the private sector through targeted credit programmes and supporting real economic activity as well as provision of liquidity to the financial system.
“These actions were accompanied by regulatory relief actions, including loosening of market regulations and activity restrictions in the financial sector,” Mr Mvunga said.
He said the BoZ had embarked on the Bond Purchase Programme to provide liquidity to the financial sector, promote bond consolidation and subsequently deepening the secondary market.
Mr Mvunga said the targeted amount of K8 billion had since been exhausted.
“The Bank also introduced short-term liquidity support to commercial banks through the BoZ Open Market Operations Window with tenors extended beyond overnight.
“In addition, the Bank revised the Interbank Foreign Exchange Market Rules aimed at supporting the interbank trading in foreign exchange, ensure market discipline and allow for more measured adjustment in the exchange rate in periods of market stress,” he said.

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