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Alba Iulia
Thursday, July 2, 2020

BoZ pumps K10 billion in the economy to improve liquidity

Economy BoZ pumps K10 billion in the economy to improve liquidity

The Bank of Zambia has announced that it has established a Targeted Medium-Term Refinancing Facility with an initial amount of K10 billion to provide medium term liquidity in light of the Covid-19 outbreak.

In a statement, Bank of Zambia Governor Denny Kalyalya said the K10 billion is part of a comprehensive list of measures that the central bank is taking to respond to the Covid-19 crisis.

Dr Kalyalya said although the full impact of the Covid-19 shock on public health and the economy cannot be determined at the moment, indications are that it will be unprecedented.

He explained that this is 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 on-lend to eligible clients and that the amount will be reviewed as conditions warrant.

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 other measures include 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.

Other measures are 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.

Dr Kalyalya said the central bank has revised loan classification and provisioning rules through the issuance of new Directives as the replacement to Statutory Instrument No. 142 of 1996, which is in the process of being revoked.

“This will allow FSPs to better accommodate lending, refinancing, and restructuring of facilities to critical sectors. Extended the transitional arrangement provided for under CB Circular No. 11/2017, wherein FSPs were granted a 3-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 central bank has allowed eligible non-bank financial institutions to henceforth partially use capital instruments that would not ordinarily qualify as common equity Tier I and Tier 2 capital, for purposes of computing regulatory capital.

“Stepped up sensitization and is encouraging the use of digital channels and contactless mobile payment mechanisms aimed at preventing the spread of the disease by minimizing person-to-person contact, decongesting banks and other financial institutions premises and reduced use of cash by Adjusting downwards the Zambia Interbank Payment and Settlement System (ZIPSS) processing fees to increase the use of the Real Time Gross Settlement System (RTGS).”

“Increasing transaction and wallet limits for individuals, small-scale farmers and enterprises as well as removing these limits for agents and corporates and waiving charges for person-to-person e-money transaction values of up to K 150 by all electronic money issuers, which will be reviewed at end April 2020,” he said.

“Approving the use of K8.0 million from interest earned on Mobile Money Trust accounts to support the provision of sanitisers at mobile money operator booths. Additional support will be provided to promote awareness amongst the public and mobile money service users; and urging commercial banks to remove transfer fees on the bank account to electronic wallet transactions for an initial period of three months and to reduce the Merchant Discount Rate (MDR).”

Dr Kalyalya said the central bank has implemented Business Continuity protocols that will ensure that systemically important payment systems and financial market infrastructures remain available.

“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. The Bank will continue to monitor the situation and take any additional measures it deems appropriate to safeguard financial system stability.”

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34 COMMENTS

  1. When financial report are written In kwacha that raises suspicion.

    “A few years later, jury duty again. The judge states that the defendant is charged with possession of 1,700 milligrams of cocaine. It was found on his body, he was arrested, and he is now on trial. This time, after the Q&A is over, the judge asks us whether there are any questions we’d like to ask the court, and I say, “Yes, Your Honor. Why did you say he was in possession of 1,700 milligrams of cocaine? That equals 1.7 grams. The ‘thousand’ cancels with the ‘milli-’ and you get 1.7 grams, which is less than the weight of a dime.” Again I’m out on the street.“ Neil Degrasse Tyson

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  2. “In 2002, having spent more than three years in one residence for the first time in my life, I got called for jury duty. I show up on time, ready to serve. When we get to the voir dire, the lawyer says to me, “I see you’re an astrophysicist. What’s that?” I answer, “Astrophysics is the laws of physics, applied to the universe—the Big Bang, black holes, that sort of thing.” Then he asks, “What do you teach at Princeton?” and I say, “I teach a class on the evaluation of evidence and the relative unreliability of eyewitness testimony.” Five minutes later, I’m on the street.”

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  3. This experiment is appropriate response. It’s new and will be an interesting one to watch. But it requires support from those who hv lent Zambia money in hard cuurrency. Sadly, these are private players (bondholders) and are not in the business of bailing out nations. Only the IMF can do that.

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  4. 10 billion kwacha if it was dollars I would be happy, the 1US DOLLAR @K19.2 renders your intervention useless, unless you tell us not to import, not taking into consideration the hyper inflationary aspect as result of your measure. Given the fact that we are not a producing country but importing country.

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  5. Looting wave again in the name of coronavirus!!! And these PF are strong, they are not catching the virus baffikkala.

  6. You can’t please diasporans. Last week these cry babies were crying saying government is not doing anything to cushion economic impact of corona. The ministry was called all sorts of names. Meanwhile we were working behind the scenes while the prophets of doom continued to wish for bad events. Here we are now with an economic solution by one of the most intelligent economists dr kalyalya. And yet you a mere cleaner in Europe think you know better. My friend take many seats

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  7. The impostor always says diaspora this and that yet he himself is pretending to be in Zambia but is based in UK,when yo corner the small boyo he says he uses VPN. Imagine someone waking up in the morning and saying what am I going to post in Kz’s name…how sad is that?

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  8. And still govt is hesitant to reduce fuel at the pump yet its been at an all time low for two months …they are still analysing if it was an increase they would have increased within 24 hours.

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  9. As I said, take many seats or issue a substantive response to the issues raised in the article. You continue alleging I am a con and yet it has not stopped you from commenting about me. If I was fake why would you waste your time on me . It appears to me that you can’t stand the fact that I have a huge following in comparison to you and your party. Go to my Facebook and see how many followers I garner there. You will have a heart attack.

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  10. Kaizer Zulu do you know that i personally know the real Kaizer Zulu…this shows how shallow minded you are…wanting too much attention is some sort of mental illnesses in case you dont know…seeking attention and crying for followers a grown man like you…leave this for teenagers please….do you even have a family or you just renting a couch in the UK

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  11. Haha anonymous after insulting me , today you claim to know me. A lot of people know me and some even claim to be my close associates. It’s common when you are a public figure. I am not here to make friends but if you would like to connect please email me or follow me on social media. Normally during the week my lusaka times account is managed by our PR team. However I can confirm that you are currently dealing with yours truly KZ

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  12. Anonymous – This impostor is a small boyo with too much time on his hands and free wifi who doesnt know they are people on this forum who were there when he posted his first post as Kz with a UK flag but he still persists with his con without shame..the same time ‘n3z the coon and his coonery’ has disappeared. This is why I laugh when PF cadres commend him the seasoned bloggers keep away….see what he does when he is irked he will go and clone my account or yours then post rubbish.

  13. Congratulations to sir keir stammer for winning the labour party presidency in UK. A good friend and business associate of mine who I have every confidence would make a good prime minister if labour won. One thin I admire about UK politics is the maturity of the opposition and their issue based politics unlike our childish friend here the upnd

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  14. @tarinyo continue with your conspiracy theories about me. At least I am keeping you busy and away from painting this forum with your usual rubbish. Continue. Kz

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  15. Again the small boyo is giving himself away with his UK news updates …with what’s going on in Zambia why would some based in there be concerned with UK Labour Party news…really laughable ….no creativity indeed!!

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  16. @tarinyo, you know even us based in Zambia have friends in other countries. Who do you think is in charge of ensuring the zambian high commission stays functional.? The problem with people like you is that your brains are very narrow and restricted. The zambian government deals with many foreign partners and there is need that we follow developments outside of our borders. There is nothing special about UK politics. By the way even a common zambian in low income areas now has access to international news and even the internet. Out of curiosity how long ago did you leave Zambia? It seems like you still think zambia is some backward village. I know stamer personally. I love how hard it is for you to accept that some one based in Zambia is doing way better than you and even knows more…

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  17. This imposter pis.shead aka “Ka!zer Zulu” is really N.3Z & MU2H0T4 rolled into one.
    I actually know who this character really is..
    A real [email protected] patient originally from Zed, currently under care of the English [email protected] [email protected] act, who was given stay after his Solicitors pleaded for him to remain on the basis of his enduring [email protected] illness.
    This Ka!zer imposter /serial attention seeker suffers from attention seeking personality disorder & deserves more sympathy than hate from all of us.

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  18. Well-intended interventions announced by BoZ but I have my reservations on their effectiveness to translate to relief for the small businesses and common man on the street. The transmission mechanism from BoZ to the commercial banks and few non-banks regulated by BoZ is weak. For instance, the mechanism to reduce the capital reserves and inject liquidity would only help if there was a substantial corporate and SME credit portfolio or mortgages sitting on the balance sheets of the banks. This is not the case as the bulk of the credit portfolio with all lenders in Zambia is consumer loans through payroll lending. Unless the banks and other micro-lenders will be restructuring these consumer loans as a result of this relief from BoZ, it will not transmit by driving or maintaining effective…

  19. ….Unless the banks and other micro-lenders will be restructuring these consumer loans as a result of this relief from BoZ, it will not transmit by driving or maintaining effective consumption and demand of product and services, the stimulus that the economy needs. Equally on the measure to drive digital/electronic transactions by raising transaction limits and reducing/scrapping transaction fees, much will depend on BoZ ability to enforce or influence FSPs and DFS providers (MNOs) to pass on these savings to the consumer. I really do hope I am wrong on both accounts.

  20. Imposter I know where to wear a tuxedo and where to a tracksuit…I am active on UK forums and know what is relevant there. You have no idea what you are talking about…the energy you use to second guess what Kz would say would be best put to other uses. This is childish….I am out of here

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  21. Kalyalya also is now the face of PF economic plunder and failure!
    How can he pump money when the exchange rates are K19 to USD1. This guy has failed and has also run out of ideas.
    Just go away, Chilyalya,..you are just pumping hot air …look at him na chimuntu chikulu ayi.
    We will wash you away with your PF; people are fed up with all of you old folks after haemorrhaging our economy. When you print money you say ati Kalyalya is pumping money; ….from where? Chiliye manyanzi!! Who are you kidding? Onani chimutu kukula na manso kwati ni nkumba! Ala, chi failure!!

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  22. Most banks in Zambia do not have the electronic wallet service. The mobile money loans in Zambia are very expensive. By the end of the day, it will be the (FSPs) who will benefit from this 10 billion

  23. Tondo – The reason is we have useless regulators and illiterate law makers if the Regulator stated that all banks in Zambia should be fully equipped to provide full online service for electronic transactions by end of October 2020, it would happen but the banks will not invest if they are not pushed some of these banks provide these services in RSA and Botswana. Why should they waste money when you are happy with just having an account. Remember what they said about contactless payments …they didnt want to invest.

  24. Don’t say we. You are British now . Why don’t you go and analyse your British government there than continue to spill your hate and sadness here. You know why you can’t? Because even after all those years spent living there, you are considered a second class citizen whose views amount to nothing. So psychologically coming here to hate on the Zambia government gives you something to feel good about. Ooooh shame on you

  25. Is LT for this pi.g headed KZ alone? The whole publication is dominated by the “matha fac.k.er” who basically has no meaningful job to do and spends his time debating with himself!

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  26. Chilyata continue crying my friend. We are every where. Come back home and see the progress we are making. As the man tasked with ensuring the pf win, I can tell you I am working mybackside off. Social media is now the most effective method to reach masses. My team is going a great job during the week in keeping my message alive here. You will die an angry man

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  27. FAKE Kaizar Zulu © , NO ONE WILL DIE..WE ARE JUST DEBATING HERE…. DONT STRESS!! WINNING ELECTIONS IS NOT EVERYTHING IN LIFE….

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  28. We need Zambia Revenue Authority to come on board and restructure the taxation of small base of the working class so as to increase liquidity in the communities. This is a sure way of directly injecting money in the economy. Besides during this period a lot of services, non-essential will be suspended. ZRA should be guided through the minister of finance, before the economy is too stretched to be impacted by such taxation policy adjustment/s. Timing is everything in this case. BoZ good move.

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