Africa Financial Sector Responses to COVID-19 - Lesotho

Jul 22, 2020

This page presents measures and initiatives by the government of Lesotho, national central bank and Development Finance Institutions (DFIs) in support of a resilient domestic financial sector facing the effects of the COVID-19 pandemic.

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Instrument

Institution

Financing volume

Description

Monetary policy

Central bank of Lesotho

N/A

(July 28, 2020) The central bank has decided to:
* Increase the NIR target floor from M 8 billion (USD 530 million) to M 9 billion (USD 550 million);
* Decrease the CBL rate from 3.75% to 3.50% for the fourth time this year.

Monetary policy

Central bank of Lesotho

N/A

(July 10, 2020) The central bank has taken measures to relieve consumers of financial products and services:
* Commercial banks have been encouraged to grant payment terms to borrowers whose financial situation will be adversely affected, based on a thorough assessment of the borrower's economic and financial situation;
* Insurance companies were asked:
- to allow policyholders to renegotiate their insurance contracts and those for which they have not paid premiums for 3 months;
- to suspend the payment of dividends for fiscal year 2019;
* Microfinance companies were requested to:
- waive fees and penalties for a period of up to 3 months due to defaults or delays in repayment
- to provide reimbursement holiday on repayments for up to 3 months for micro, small and medium enterprises;
- restructure the loans of distressed clients without penalties or fees during the 3 months of the Covid-19 pandemic;
* Mobile money providers were also requested to reduce mobile money fees on all transactions below M 50.00 (USD 2,95) and to increase daily and monthly limits for certain user groups.

Monetary policy

Central bank of Lesotho

N/A

(May 22, 2020) Having considered the developments and prospects for the net international reserve, inflation and regional interests, the outlook for interest rates, the domestic economic situation and the global economic outlook, the central bank has decided to:
* Reduce the NIR target floor from M 11 billion (USD 660 million) to M 8 billion (USD 530 million);
* Reduce the CBL rate from 4.25% to 3.75% for the third time this year.

Monetary policy

Central bank of Lesotho

N/A

(April 14, 2020) For the second time this year, the monetary policy committee has decided to reduce the central bank rate from 5.25% to 4.25%.

Monetary policy

Central bank of Lesotho

N/A

(March 23, 2020) The central bank has implemented the following monetary policies to support the economy :
* Reduction of the central bank (CBL) rate from 6.25% to 5.25%;
* Increasing the Net international reserve (NIR) target floor from Loti (M) 10 billion (USD 630 million) to M 11 billion (USD 660 million). 

 

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