News & Analysis: Monetary policy
Dr. Patrick Njoroge, Governor of the Central Bank of Kenya, speaks to COVID-19 Africa Watch about Kenya’s economic journey since the onset of the pandemic, the role government has played in mitigating the worst impacts on households and businesses, and the reasons for optimism when it comes to the path ahead.
“The Nigerian government has responded notably to address the pandemic’s impact on the economy. So far, $ 1.4 billion in additional spending has been executed, which is estimated at 0.3% of GDP. This paper examines the macroeconomic landscape and policy interventions in Nigeria with the objective of developing lessons not only for Nigeria but for other developing economies.”
“The central bank in each respective country must start to facilitate this process of metamorphosis, which is required now, more than ever before—again because of the devastating short- and medium-term impact of COVID-19, which is still ongoing.”
“Uganda’s Central Bank kept its benchmark policy rate unchanged at seven percent Wednesday in a strategic move that promises stable lending rates amidst increased credit default levels and renewed strength in the value of the Uganda shilling against the US dollar.”
“Today, the earlier fear of a dangerous lack of liquidity has been replaced in large part by concerns about the ability of the international financial architecture to support countries with increasing levels of debt and uncertain access to capital. One worrisome aspect seems clear: Many countries will require debt relief in the next few years if they are to maintain or restore access to financial flows. Higher interest rates in advanced economies, and the United States in particular, could compound the difficulties of emerging market countries in servicing existing debt and refinancing maturing debt.”
“Yellen called on richer countries to step up both economic and public health assistance to poorer nations reeling from COVID-19. She noted as many as 150 million people across the world risk falling into extreme poverty as a result of the crisis.”
“China is the world’s largest official creditor, but we lack basic facts about the terms and conditions of its lending. Very few contracts between Chinese lenders and their government borrowers have ever been published or studied. This paper is the first systematic analysis of the legal terms of China’s foreign lending.”
“South Africa’s central bank has kept its main interest rate at a historic low of 3.5 per cent, breaking with emerging-market peers that have increased rates following this year’s surge in US Treasury yields.”
“The pandemic has caused a global economic crisis. Africa’s GDP contracted 2.1 percent in 2020, the continent’s first recession in half a century. It is estimated that about 39 million Africans could fall into extreme poverty in 2021 if appropriate support is not provided, with disproportionate effects on women.”
“Amidst a currency depreciation induced cost push inflationary environment, the Monetary Policy Committee decided to raise the interest rate whose quantum was nonetheless hampered by a suppressed business ecosystem fueled by disease pandemic effects.”
A hub for information, analysis, and the global response to COVID-19’s impact on Africa