Zambia by huangyuarong

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									DEVELOPMENTS IN FINANCIAL MARKETS OF ZAMBIA




Presented to the CCBG Financial Markets Subcommittee, Namibia, 27 -29 February 2012
GIVE DETAILS OF THE INTRODUCTION OF ANY NEW
INSTRUMENTS IN THE FINANCIAL MARKETS OVER THE
PAST YEAR



•   Visa Platinum Debt Card
•   Prepaid Card
•   Personal Global Account Management Service in Internet Banking
•   Visa Electron Cad
•   Cash Management Service
•   E-Wallet
•   Home Loans Product
•   Joint Airtime Rewards Campaign
•   InvestFlex Account
•   SME Visa Debit Card


4/24/2012                                                            2
GIVE DETAILS OF THE INTRODUCTION OF ANY NEW
INSTRUMENTS IN THE FINANCIAL MARKETS OVER THE
PAST YEAR



•   Express Loans Product
•   SME Quick Loans Product
•   Banking Service to Indian Nationals in Zambia
•   Marathon Savings Account
•   Off-shore Fixed Income Investment Account
•   Chinese Currency Account
•   Pure Savings Account
•   Back to School Referral Campaign
•   Visa Prepaid Card
•   UBA/Maney Gram WinWin Campaign


4/24/2012                                           3
LIST ANY FACTORS THAT CONTRIBUTED TO THE
DEVELOPMENTS IN THE MARKETS


• Measures aimed at reducing the cost of funding for commercial banks
  with the view to making it for them to effect meaningful reductions to
  their base lending rates
    – Reduction in Statutory Reserve Ratio on both domestic (ZMK) and foreign currency
      deposits to 5% from 8%

    – Reduction in Core Liquid Asset Ration to 9% from 6%

    – Reduction in the Overnight Lending Facility (OLF) margin to 2 percentage points
      from 4 percentage points above the interbank rate

• stimulate secondary market trade
    – Reduction in the frequency of Treasury bill auction from weekly to fortnightly



4/24/2012                                                                               4
INVESTOR AND PUBLIC AWARENESS INITIATIVES IN THE
DEVELOPMENT OF FINANCIAL MARKET



•   There is an action plan under the Financial Sector Development Plan (FSDP)
    to develop a national strategy on financial literacy

•   Commercial banks are required to disclose fees and charges which the Bank
    of Zambia (central bank) publishes in the print media to assist the public make
    informed decisions with regard to the cost of bank services

•   Bank of Zambia undertakes road shows as well as radio/television
    programmes to explain to the public its role in the financial markets

•   The Bank of Zambia is closely working with the Zambia Institute of Bankers
    and Financial Services to provide specialised training in financial products

•   Bank of Zambia has an open door policy where students, would be investors
    and the general public are sensitised on the central bank’s role in the economy
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WHAT ARE THE LEVELS OF RESERVES IN US DOLLARS? (IN
MONTHS OF IMPORTS OF GOODS AND SERVICES



•      4.0 months End December 2010

•      3.4 months End December 2011




    4/24/2012                                        6
FACTORS THAT CONTRIBUTED TO THE BUILD UP OF
FOREIGN RESERVES



• Tax receipts from mines

• Central bank purchases from the market reflecting increased portfolio
  inflows and robust export sector performance

• Balance of Payments Support




4/24/2012                                                                 7
IN WHAT MARKETS AND INSTRUMENTS ARE THE FOREIGN
RESERVES INVESTED?




• Markets

    – Money Markets

    – Fixed Income Markets


• Instruments

    – Fixed Term Deposits

    – Government Securities



4/24/2012                                         8
WHAT IS YOUR RESERVES MANAGEMENT POLICY?
PASSIVE, ACTIVE, USE OF EXTERNAL FUND MANAGERS



• Passive Policy

    – Primary objective of safety (control market and credit risk) and
      liquidity (maintain sufficient liquidity)

    – Earn reasonable return subject to safety and liquidity objectives

    – Use external fund managers




4/24/2012                                                                 9
DO YOU HAVE A CODE OF CONDUCT FOR DOMESTIC AND
FOREIGN MARKETS OPERATIONS (INTERNAL AND
INDUSTRY)




• Internal – Foreign Exchange Dealing Guidelines (2006)

• External – Banking and Financial Services Act (Foreign Exchange
  Market (Code of Conduct) Guideline (2003)




4/24/2012                                                           10
WHAT SYSTEMS ARE USED FOR FOREIGN EXCHANGE
TRADING?




• Reuters Dealing




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WHO ARE THE PARTICIPANTS IN THE FOREIGN EXCHANGE
MARKET?




• Commercial banks

• Importers

• Exporters

• Bureaux de change

• General public

• Foreign Tourists
4/24/2012                                      12
  CHANCES IN REGULATIONS/LAWS GOVERNING FINANCIAL
  MARKETS IN THE RECENT PAST YEAR




Effective March 2010
• Global Master Repurchase Agreement for Zambia

• Secondary Market Rules and Practices of the Zambian Government
  Securities Market (ZGS)

• Code of Conduct for Participants in the Zambia Government Securities
  (ZGS) Repo Transactions


4/24/2012                                                            13
ANY CHANGES IN THE AUTHORITIES REGULATING THE
FINANCIAL MARKETS IN THE PAST YEAR?



• There has not been any changes in the authorities regulating financial
  market in the past year.




4/24/2012                                                                  14
ANY CHANGES WITH RESPECT TO YOUR CENTRAL BANK’S
COMPLIANCE WITH IFRS?




• There has not been any changes with respect to compliance with IFRS




 4/24/2012                                                              15
THANK YOU

								
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