March 28, 2020

What Has Rwanda Done as COVID-19 Policy Responses?


Responding to government advisory, a trader in Byangabo center located in Musanze district, paint stand pointa for clients to enforce the recommended social distance

The International Monetary Fund (IMF) has introduced a “Policy Tracker” for policies of governments to the COVID-19 Pandemic.

This policy tracker summarizes the key economic responses governments are taking to limit the human and economic impact of the COVID-19 pandemic as of end-March 2020. The tracker includes 186 economies. More to be added, says the Fund.

NOTE: The tracker is not meant for comparison across members as responses vary depending on the nature of the shock and country-specific circumstances. The tracker focuses on discretionary actions that supplement existing social safety nets and insurance mechanisms. These existing mechanisms differ across countries in their breadth and scope. The information included is publicly available and does not represent views of the IMF on the measures listed.

HERE IS WHAT RWANDA HAS DONE AS OUTLINED BY IMF TRACKER

As of March 26, 2020, Rwanda has reported 50 cases of COVID-19 infection (no deaths). The government has implemented a range of containment measures in response to the pandemic including border closure, suspension of domestic travel, cancellation of public gatherings, institution of teleworking, and closure of schools, places of worship and non-essential businesses.

Key Policy Responses as of March 25, 2020

FISCAL
  • The pandemic is expected to cause a revenue shortfall of 1.9 percent of GDP. The government’s emergency response plan, including health-related spending, is estimated at about 1.5 percent of GDP. The government is working on a fiscal stimulus package that may include scaled-up health spending to support affected individuals and targeted fiscal support for the hospitality industry and other hard-hit sectors, as well as SMEs.
MONETARY AND MACRO-FINANCIAL
  • On March 18, the central bank announced liquidity support measures: (i) an extended lending facility worth RWF 50 billion available to liquidity-constrained banks for the next six months. Under this facility, banks can borrow at the policy rate and benefit from longer maturity periods; (ii) Treasury bond purchases through the rediscount window for the next six months; and (iii) lowering of the reserve requirement ratio by 100 basis points, from 5 to 4 percent, effective from April 1. Loan repayment conditions were also eased for impacted borrowers, and charges on electronic money transactions waived for the next three months. The central bank is also working closely with the Minister of Economy and Planning to provide support to microfinance institutions.
EXCHANGE RATE / CAPITAL FLOW MANAGEMENT
  • No measures. The central bank remains committed to maintaining exchange rate flexibility and limiting foreign exchange market interventions to avoiding excessive exchange rate volatility.
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