News & Analysis: Monetary policy
“Pre-pandemic economic challenges, such as limited fiscal space, high debt levels and inflation, have also contributed to countries’ weak economic responses. External financing has been crucial for LICs’ ability to respond to the pandemic, but, is still inadequate given the huge financial gap that exists.”
“Policymakers and central bankers in the West African Monetary Zone are tackling COVID-19-induced difficulties in the maintenance of price, financial system stability and sustainable growth in their economies. The central bank governors met in Lagos to discuss diverse and tailored measures deployed by them to meet the peculiar shocks the pandemic had exposed their individual economies. “
“Analysts and bankers say Egyptian lenders, which are generally cash-rich with low loans-to-deposit ratios, may find profits fall and bad loans rise. But they expect banks to remain financially stable.”
COVID-19 Africa Watch talks to Dr. Youssef Boutros-Ghali, former Finance Minister of Egypt and former chairman of the IMF’s International Monetary and Financial Committee, about the economic impact of the pandemic, the policy response, SDRs, and more.
“Restrictions on movement in Nigeria made it much more expensive to move equipment around. Some clients were short of cash and unable to make advance payments. These included government projects relying on public funding.”
“Tough conditions are straining profits of Moroccan banks and increasing the risk of bad loans, analysts and bankers say. But they also note that the banks enjoy high levels of liquidity, and that measures by the Banque Al-Maghrib, the central bank, to support the economy and to reduce the adverse effects on lenders are helping shore up resilience.”
“Kenya’s central bank agreed to keep its interest rate steady during its November meeting, as East Africa’s largest economy expects to recover from COVID-19 disruptions in the second half of this year. The monetary policy committee maintained its benchmark rate at 7% for the sixth straight meeting since March, when it eased the policy environment to deal with the effects of the global pandemic.”
“South Sudan’s economy is dead on its feet. Falling oil prices have squeezed government revenues, sending hard currency reserves tumbling and inflation soaring. Political stability may now rest on the ability of leaders to maintain discipline in their ranks and confidence in each other, as the financial bargain at the heart of the 2018 peace agreement comes under pressure.”
“Africa’s biggest economy has sunk into its second recession in less than five years, battered by the oil price crash brought on by the coronavirus pandemic.”
“Before the conflict and COVID-19, South Sudan was drilling more than 250,000 barrels of crude oil per day, which has now dropped to 180,000 barrels per day. In an extraordinary meeting, the Central Bank Monetary Policy Committee made five resolutions aimed at tackling the devaluation of crude oil.”
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