Coronavirus: The Bank of Mauritius Introduces a Support Programme to Accompany Local Economic Operators Across all Sectors
On 10 March 2020, the Monetary Policy Committee of the Bank of Mauritius reduced the key repo rate by 50 basis points to 2.85% per annum and on 13 March 2020, the Bank of Mauritius introduced a Support Programme to further assist Mauritian businesses across all economic sectors.
Five key measures have been introduced in the Support Programme:
- Special relief amount of Rs5-billion: This measure is introduced through commercial banks to meet cash flow and working capital requirements of economic operators in all economic sectors directly impacted by the Coronavirus, including SMEs. Such special relief amount will be made available through commercial banks from 23 March 2020 up to 31 July 2020. Interest on these advances will be capped at fixed rate of 2.5% per annum, with a moratorium of six months on repayment of capital and interests for a two-year loan.
- Reduction of cash reserve ratio applicable to commercial banks: with immediate effect, until further notice, the cash reserve ratio applicable to commercial banks is reduced from 9% to 8%.
- Moratorium on capital repayment for loans: a moratorium of six months for existing loans for economic operators that are being affected by the Coronavirus has been issued.
- Easing of banking guidelines: the Guideline on Credit Impairment Measurement and Income Recognition, which was effective since January 2020 has been put on hold.
- issue of two-year bank of Mauritius 2020 savings bond: As from 23 March 2020, the Bank of Mauritius will issue a bond for an amount of Rs5-billion. This bond will be issued at par in multiples of Rs25 000 to:
- individuals who are residents of Mauritius and up to a maximum cumulative investment amount of Rs1-million per investor, whether singly or jointly; and
- to locally registered non-governmental organisations running on a non-profit making basis for the same maximum investment amount of Rs1-million.
The terms and conditions of such bonds will be as provided in the relevant prospectus of each commercial banks.
Link to article