Central Bank: No policy intervention over coronavirus

Central Bank: No policy intervention over coronavirus
Central Bank (photo courtesy of the Central Bank)

NASSAU, BAHAMAS – The Central Bank of The Bahamas has no direct monetary policy intervention planned for the coronavirus (COVID-19), according to Governor John Rolle.

Rolle said the regulator’s emphasis is on ‘maintaining economic stability and orderly adjustments in spite of the shock”.

In an emailed response to Eyewitness News inquiries, Central Bank Governor John Rolle stated: “A direct monetary policy intervention is not planned for the Coronavirus, since it would have to target Bahamian tourism demand that is beyond the reach of these tools.”

He said: “Our emphasis is on maintaining economic stability and orderly adjustments, in spite of the shock.  The Central Bank will focus on preserving access to the foreign exchange markets, so that trade and international payments transactions continue to function smoothly.  External reserves are at historically high levels to provide this level of support. ”

Rolle noted that some households and businesses will be more adversely impacted than others from tourism sector challenges.

“However, the commercial banks, given their high capital levels, will also be able to support the collective adjustments that might be imposed on borrowers that encounter hardships,” he said.

Mounting concerns over the economic impact of the COVID-19 have already resulted in countries like the United States, Canada, Australia and Malaysia slash interest rates.

The virus first broke out in Wuhan, China back in December, but has now spread to every continent with the exception of Antarctica.

The death toll attributed to the virus continues to rise, with tens of thousands of people infected and thousands of others killed by the virus, mostly in China.