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“GUIDING PRINCIPLES ON CENTRAL BANKS’ STRATEGIES TO SUPPORT ECONOMIC RECOVERY IN THE POST-PANDEMIC PHASE OF THE NEW CORONA VIRUS. ” DinarDailyUpdates?bg=330099&fg=FFFFFF&anim=1

“GUIDING PRINCIPLES ON CENTRAL BANKS’ STRATEGIES TO SUPPORT ECONOMIC RECOVERY IN THE POST-PANDEMIC PHASE OF THE NEW CORONA VIRUS. ”

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“GUIDING PRINCIPLES ON CENTRAL BANKS’ STRATEGIES TO SUPPORT ECONOMIC RECOVERY IN THE POST-PANDEMIC PHASE OF THE NEW CORONA VIRUS. ” Empty “GUIDING PRINCIPLES ON CENTRAL BANKS’ STRATEGIES TO SUPPORT ECONOMIC RECOVERY IN THE POST-PANDEMIC PHASE OF THE NEW CORONA VIRUS. ”

Post by claud39 on Thu Nov 26, 2020 1:19 pm

“GUIDING PRINCIPLES ON CENTRAL BANKS’ STRATEGIES TO SUPPORT ECONOMIC RECOVERY IN THE POST-PANDEMIC PHASE OF THE NEW CORONA VIRUS. ”


2020-11-25



“GUIDING PRINCIPLES ON CENTRAL BANKS’ STRATEGIES TO SUPPORT ECONOMIC RECOVERY IN THE POST-PANDEMIC PHASE OF THE NEW CORONA VIRUS. ” Logo-ar



The guiding principles included many aspects that concern financial stability issues, most notably:
Early preparation of central banks and early preparation for the post-crisis phase
 Enhancing coordination between macroprudential policies and economic policies
The gradual build-up of capital and liquidity margins that were eased during the coronavirus crisis strengthened the financial sector's risk management system
Continuing to adopt an accommodative monetary policy to consolidate the economic recovery
Strengthening the digital infrastructure of the financial system
Supporting the individual and corporate sectors in the economic recovery phase


 In the context of the Arab Monetary Fund's keenness to provide support to its member states in the field of economic, financial and monetary reforms that seek to enhance financial stability in the Arab region in light of the Corona pandemic crisis, and based on discussions that have taken place in the numerous consultative meetings organized by the Fund since April 2020) At the level of Excellencies, Governors and Deputy Governors of Central Banks and Arab Monetary Institutions, as well as at the level of members of the Arab Committee for Banking Supervision, the Financial Stability Working Group and the Regional Working Group to Promote Financial Inclusion and the Working Group of Modern Financial Technologies in the Arab Countries, the Arab Monetary Fund has issued the Principles Guidance on central banks' strategies to support economic recovery in the post-pandemic of the new Corona virus.

The guiding principles included a set of recommendations related to central bank policy and strengthening the crisis management system, stressing the importance of early preparation for the Crisis Management Committee or the Financial Stability Committee within the Central Bank and early preparation for the post-crisis phase, by developing a strategy for the post-crisis phase, in addition to Emphasizing the continuation of economic support measures for an appropriate period in the recovery phase, in order to ensure the flow of liquidity into the economy. The success of measures taken is influenced by the timing of their mitigation or withdrawal. The principles call for not withdrawing support packages early, which may lead to a decrease in the volume of credit required to support the corporate and household sectors, while also delaying their withdrawal may increase the systemic risks in the financial sector.

In this context, the principles emphasized the need for coordination and cooperation between the monetary and financial policies and the macroprudential policy, and for the monetary and financial policies and the precautionary and macro policies to support each other. The guiding principles also emphasized the need for the gradual application of macroprudential policy tools that have been relaxed or liberalized during the current crisis, in addition to the importance of continuing to adopt an easing monetary policy to consolidate the economic recovery, which means delaying raising interest rates on monetary policy tools for an appropriate period of time, provided that The leverage is graded in line with changes in fiscal policy instruments and macroprudential policy.

The principles also recommended the importance of central banks continuing to adopt government financing programs led by the central bank to support productive economic activities at appropriate interest rates and deadlines. It also called for setting appropriate frameworks for banks' dealings with their good customers, whose cash flows were affected by the Corona pandemic, and to study solutions related to mitigating the negative impact on their creditworthiness, provided that this is taken into account in their credit reports. The principles in this regard stress the holding of consultative meetings between the Central Bank and commercial banks, to discuss the possibility of continuing to suspend or reschedule private sector loans to some clients, in a way that reduces insolvency cases for viable companies.

In recognition of the great repercussions of the emerging corona virus pandemic on the financial sector, the principles called for the necessity of conducting an assessment study of the reality of the financial sector before and after the crisis of the Coronavirus pandemic, in order to determine the extent of the damage caused to it, especially financial strength indicators, provided that only achieved indicators are satisfied. Rather, by building expectations for these indicators based on scientific methodologies and standard models, and developing appropriate plans, solutions and recommendations to address deficiencies or weaknesses that may appear.
On the other hand, the guiding principles indicated the importance of the Central Bank requesting commercial banks to provide it with a report approved by the Board of Directors, assessing the extent to which they are affected by the Corona pandemic, and the expected impact on financial strength indicators, especially the ratio of non-performing loans, capital adequacy ratio, profitability, and liquidity , Provided that the report includes an assessment of credit, market and operational risks, and a time plan to address any weaknesses or deficiencies therein.
 
In addition to the above, the principles dealt with many aspects of concern to financial stability issues, the most important of which are supervisory and precautionary requirements, the risk management system, macro and micro stress tests, business continuity plans, recovery plans, modern financial technologies, digital financial inclusion, and other aspects that Enhance financial stability.
 
On this occasion, His Excellency Dr. Abdul Rahman bin Abdullah Al Hamidi, Director General, Chairman of the Board of Directors of the Arab Monetary Fund, expressed his pleasure to issue guidelines on central banks' strategies to support economic recovery after the emerging Corona virus crisis, stressing the instructions that came in them to help preserve Financial stability in the Arab countries, which complement the principles and guidelines issued by the Fund during the Coronavirus pandemic crisis. His Excellency renewed his wishes that our dear Arab countries and the countries of the world will be saved from this epidemic, and that the repercussions of this crisis will be quickly overcome.
 
In order to view the "Guiding Principles on Central Banks Strategies to Support Economic Recovery in the Post-pandemic of the Novel Coronavirus", please go to the Arab Monetary Fund website at the following two links:
 



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