BoZ Cuts Reserve Ratio to Boost Lending
Kalyalya says move will increase liquidity in banking sector as central bank defends financial regulations By Francis Maingaila LUSAKA, Zambia24 — 31 July 2026 — The Bank of Zambia (BoZ) has reduced the statutory reserve ratio on Kwacha deposits from 26 percent to 21 percent, a move Governor Dr. Denny Kalyalya says will inject more liquidity into the banking system and give commercial banks greater capacity to support businesses and economic activity. Dr. Kalyalya said the adjustment, effective Monday, August 3, 2026, will allow banks to retain a larger share of their Kwacha deposits instead of keeping the funds as reserves with the central bank. He said the measure is expected to improve financial intermediation by creating more room for commercial banks to provide financing to productive sectors such as agriculture, manufacturing and small and medium enterprises. The Governor said the reduction applies to Kwacha deposits, including Government and Vostro deposits, while the sta...