LUSAKA (Reuters) – Zambia’s central bank said on Monday it would from next week raise the minimum amount of local and foreign currency deposits that commercial banks must keep with the state lender in a bid to curb the depreciation of the local kwacha currency.
The minimum statutory reserve ratio on both local and foreign currency deposits, including government deposits and vostro account deposits, will be increased by 3 percentage points to 14.5% from 11.5% starting Nov. 13, the central bank said in a notice dated Nov. 3 and seen by Reuters on Monday.
“The measure is aimed at relieving the persistent foreign exchange market pressure with a view to reigning in on inflation,” it said.
The market has remained starved of dollars while demand for the greenback has grown, putting pressure on the kwacha which has deprecated 23.27% so far in 2023, Access Bank said in a note on Monday.
(Reporting by Chris Mfula; Editing by Bhargav Acharya and Miral Fahmy)