Central Bank of Trinidad and Tobago Monetary Policy Report ... · Trinidad and Tobago were...
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Central Bank of Trinidad and Tobago Monetary Policy Report, May 2020 HIGHLIGHTS GLOBAL RESPONSE AND IMPACT Travel restrictions Stay-at-home orders Social distancing Regional Developments Domestic Developments Increased unemployment Reduced economic activity Disrupted supply chains Depressed global demand Jolted financial and commodity markets The emergence and spread of the novel coronavirus (COVID-19) has wreaked havoc globally, impacting the health, well-being and lives of millions. The fiscal measures adopted by the Government of Trinidad and Tobago were complemented by strong monetary policy action by the Central Bank. Loss of economic activity, especially within the tourism sector. Compromised government revenue given COVID-19 containment measures. Worsened fiscal accounts due to fall in energy prices. Constrained domestic economic activity and increased unemployment. COVID RESPONSE – VARIOUS CENTRAL BANKS STAY HOME STAY SAFE 1M Accommodative Policy Response The Repo rate was reduced from 5.00% to 3.50% on March 17, 2020. The Reserve Requirement Ratio for commercial banks was reduced from 17% to 14% on March 17, 2020. Impact Average daily excess liquidity increased from $4.0bn (January 2 - March 17, 2020) to $5.7bn (March 18 – April 30, 2020) and further to $8.3bn (May 2020). The median basic prime lending rate fell from 9.25% to 7.50% at the end of March 2020. Federal Reserve Bank Eastern Caribbean Central Bank Bank of Barbados Reserve Bank of India Interest rate cuts Asset purchases Reduced reserve requirements Other liquidity support measures Moratorium directive Disbursements of funds to members Bank of Jamaica People’s Bank of China European Central Bank Bank of England KEY COVID RESPONSE – CENTRAL BANK OF TRINIDAD AND TOBAGO Objectives Augment liquidity in support of the economy and the financial system. Make credit more accessible and cheaper.
Transcript of Central Bank of Trinidad and Tobago Monetary Policy Report ... · Trinidad and Tobago were...
Central Bank of Trinidad and TobagoMonetary Policy Report, May 2020
HIGHLIGHTS
GLOBAL RESPONSE AND IMPACT
Travel restrictions
Stay-at-home orders
Social distancing
Regional Developments Domestic Developments
Increased unemployment
Reducedeconomic activity
Disruptedsupply chains
Depressedglobal demand
Jolted �nancial and commodity markets
The emergence and spread of the novel coronavirus (COVID-19) has wreaked havoc globally, impacting the health, well-being and lives of millions.
The �scal measures adopted by the Government ofTrinidad and Tobago were complemented by strong monetary policy action by the Central Bank.
Loss of economic activity, especially within the tourism sector.
Compromised government revenue given COVID-19 containment measures.
Worsened �scal accounts due to fall in energy prices.
Constrained domesticeconomic activity and increased unemployment.
COVID RESPONSE – VARIOUS CENTRAL BANKS
STAY HOMESTAY SAFE
1M
Accommodative Policy Response
The Repo rate was reducedfrom 5.00% to 3.50% on March 17, 2020.
The Reserve Requirement Ratio for commercialbanks was reduced from 17% to 14% on March 17,2020.
Impact
Average daily excess liquidity increased from $4.0bn (January 2 - March 17, 2020) to $5.7bn (March 18 – April 30, 2020) and further to $8.3bn (May 2020).
The median basic prime lending rate fell from 9.25% to 7.50% at the end of March 2020.
Federal Reserve Bank
Eastern CaribbeanCentral Bank
Bank of Barbados Reserve Bank of India
Interest rate cutsAsset purchasesReduced reserve requirements
Other liquidity support measuresMoratorium directiveDisbursements of funds to members
Bank of Jamaica People’s Bank of China
European Central BankBank of England
KEY
COVID RESPONSE – CENTRAL BANK OF TRINIDAD AND TOBAGO
Objectives
Augment liquidity in support of the economy and the �nancial system.
Make credit more accessible and cheaper.
