The Central Bank has asked the government to immediately raise fuel prices and electricity tariffs and to increase government revenue through suitable tax increases.
The Central Bank’s request follows a meeting of its monetary board on 3rd March.
‘The government needs to take urgent and concerted measures to overcome the country’s current economic challenges’, it said in a press release after the meeting of the board. ‘The government will need to complement the efforts taken by the Bank to overcome these challenges’
The Bank has also advised the government to take urgent measures to discourage non-essential and non-urgent imports, incentiviseforeign remittances and investments and to implement energy conservation measures while moving towards renewable energy.
Additionally, it has asked the government to mobilise foreign financing and non-debt forex inflows on an urgent basis, monetise the non-strategic and underutilised assets and postpone non-essential and non-urgent capital projects.
The Central Bank’s request follows yesterday’s missive from the International Monetary Fund to the government to urgently implement a credible and coherent strategy to restore macroeconomic stability and debt sustainability.
During its meeting yesterday, the Central Bank monetary board also decided to increase the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) of the Central Bank by 100 basis points each, to 6.50 per cent and 7.50 per cent.
The board said it will revise upwards the caps imposed on interest rates applicable to credit cards to 20 per cent per annum, on pre-arranged temporary overdrafts to 18 per cent per annum, and on pawning facilities to 12 per cent per annum.
The Central Bank will issue directions shortly to regulate these interest rates.
To read the full press release click on
