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Lusaka, Feb 3 (IANS) Zambia’s central bank on Thursday raised statutory reserve ratio, the rate at which commercial banks keep funds in the central bank, to address volatility in the foreign exchange (forex) market.
Bank of Zambia’s Deputy Governor Francis Chipimo said in a circular to all commercial banks that the ratio would be increased by 2.5 percentage points to 11.5 per cent.
“This measure is aimed at addressing the increased volatility in the exchange rate which intensified in December 2022, and has persisted in 2023,” he said, as quoted by Xinhua.
The increased reserve ratio comes into effect on February 13.
Chipimo said the country’s currency has come under sustained depreciation despite the central bank’s support to the market through sales of foreign exchange.