Central bank moves to mitigate COVID-19 economic impact

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The National Bank of Rwanda announced Wednesday a series of measures taken to mitigate the economic impact of the COVID-19 virus, including introduction of extended lending facility to commercial banks.

In a statement, the central bank said it had put in place a facility of 50 billion Rwandan francs (about 52.1 million U.S. dollars) that banks with liquidity challenges can borrow from at central bank rate.

“The tenor is extended from overnight to 3, 6 and 12 months. This facility is available for the next six months and shall be disbursed at the discretion of the central bank,” the statement said.

The central bank also said it had reviewed the existing treasury bonds rediscounting window.

For the next six months the central bank offers to buy back bonds at the prevailing market rate and the waiting period if one fails to sell the bond at the secondary market will be reduced from the current 30 days to 15 days, it said.

The central bank also reduced the reserve requirement ratio from April 1, 2020, lowering it from 5percent to 4 percent in order to allow banks more liquidity to further support affected businesses, according to the statement.

The central bank also allowed banks to exceptionally restructure outstanding loans of borrowers facing temporally cash flow challenges arising from the COVID-19 pandemic.

Meanwhile, for the next three months effective Friday mobile network operators and banks agreed to zero charges on all transfers between bank accounts and mobile wallets in an effort to limit the risk of transmission of the virus through handling of cash and other non-virtual means of payment.

Mobile network operators and banks also agreed zero charges on all mobile money transfers.

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