The announcement to maintain the current monetary policy rate is partly predicated on the evolving global economic dynamics, which has transmitted adverse effects to domestic economic developments. In May this year, the
The CBL Board of Governors also decided to continue the suspension of the Standing Deposit Facility (SDF) and the Remittance Split Policy to enhance stability of the financial sector.
Henceforth, it is announced that commercial banks will only be restricted to purchase the CBL Bill on a one to three-month period to allow for greater sterilization effect.
On the global front, two critical economic situations further motivated the CBL's monetary policy decisions at the recent Board meeting, namely:
COVID-19: The lockdowns, arising from COVID-19, triggered cutbacks in investments, supply chain disruptions and uncertainty, resulting to revision of global economic growth projections to negative 4.9% from negative 3.0% in 2020. In addition, inflation projections are put at 0.4% and 1.2% in advanced and emerging markets economies, respectively.
Monetary Policy Rates: In
The Domestic Economy
Consistent with developments in the global economy, economic activity in
At the quarter ended-
These developments, in addition to decisions of heightening financial education for increased retail subscriptions for the instruments and strengthening policy coordination with the fiscal authority on liquidity management to sustain the downward inflation spiral, prompted the CBL's Board to keep the monetary policy rate unchanged at 25%.
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