US$53 Million set aside as Loans to Improve the Liquidity of Commercial Banks by the National Bank of Rwanda
By Abdul Rahman Bangura –
NEW AFRICA BUSINESS NEWS ( NABN ) Freetown, Sierra Leonne- National Bank of Rwanda (NBR) March 19th, 2020 declared openly that, it had put in place $53 Million encouragement capital to boost the liquidity of commercial banks in order to maintain loans to the private sector. These are one of the interventions by the central bank to hamper the impact of coronavirus on the economy.
It’s reckoned that, this promising efforts by the Central Bank of Rwanda is anticipated to promote banks with liquidity challenges to operate for short periods of time in a bid to proceed inoculating money into the economy. The fund will be flexible with windows ranging 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,” a statement signed by central bank Governor John Rwangombwa reads in part.
The central bank also directed commercial banks to ease loan repayment conditions to borrowers whose income flows, have been affected by the global COVID-19 pandemic.
This, some banks are inclined to encounter soft liquidity challenges as loan reimbursement hinders down and more demand in allotment. Rwangombwa announced that, the fund will initiate distribution n as soon as they glance confirmation of liquidity in the local market.
The budget is determined to enable banks to proceed with issuances to the private sector which will be essential to maintain them floating and maintain business survival rates. The reserve, associated with the restructuring of loans and relief of loan reimbursement, will also authorize firms to keep supply and value chains open by re-investing the returns from their revenue.
Anyway, this will the country strengthen the supply of goods and products vital for consumption. Coronavirus cases in Rwanda rose to 11, prompting the government to suspend all commercial flights.
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