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IMF reaches agreement with Benin Republic to extend its $658 million credit facility

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The International Monetary Fund (IMF), has reached what it termed as a staff-level agreement with Benin Republic on a new 42-month extended credit facility worth $658 million.

In a statement on Friday, the global bank said the extension is intended to help the impoverished West African country address its pressing financing needs related to security, the impact of the COVID-19 pandemic and the war in Ukraine, as well as anchor its national development plan.

“IMF staff and the Beninese authorities have reached agreement on an innovative program – first case under the IMF’s High Combined Credit Exposure (HCCE) policy – to support the economy in the near-term while advancing policies and reforms to foster sustained private sector led growth,” the statement said.

The agreement which is subject to approval by IMF Management and the Executive Board around mid-June 2022, will see Benin having access to borrow from the IMF on more liberal terms, according to the statement.

An IMF team led by Constant Lonkeng, held meetings with Beninese representatives in Cotonou during April 4–13 and in Washington D.C. during April 19–22 to negotiate a new program in support of the authorities’ ambitious policy plans and to conduct the 2022 Article IV consultation. The agreement is subject to approval by IMF Management and the Executive Board around mid-June 2022.

At the end of the mission, Mr. Lonkeng issued the following statement:

“I am pleased to announce that the Beninese authorities and the IMF team have reached a staff-level agreement on new 42-month blended Extended Credit Facility (ECF) and Extended Fund Facility (EFF) arrangements to support the authorities’ economic and financial policies.

“The proposed exceptional access under the ECF/EFF of SDR 484.058 million (equivalent to US$ 658.4 million or 391 percent of quota) seeks to help Benin address pressing financing needs, preserve macroeconomic stability, and anchor the country’s National Development Plan centered on achieving Sustainable Development Goals (SDGs).

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Kenya’s apex bank sets lending rate benchmark at 8.75%

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Kenya’s central bank on Monday announced new monetary policy holding its benchmark lending rate steady at 8.75%.

Kenya’s monetary policy committee however said, its last hike in November was still working its way through the economy, stressing that there are there had been others measures that could help to lower inflationary pressure.

The committee said “this action will be complemented by the recently announced government measures to allow limited duty-free imports on specific food items, which are expected to moderate prices.”

Inflation inched down to 9.1% in December, the second straight month of decrease, but still above the government’s preferred band of 2.5-7.5%.

Policymakers major African countries like Nigeria and South Africa have hiked rates last week, while their Ghanaian counterparts hiked earlier on Monday.

Policymakers raised the policy rate for the first time since 2015 during their meeting in May last year, when they increased it by 50 basis points, citing growing inflation.

They followed that with a 75 basis points hike in September and another one of 50 basis points in November.

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Nigeria’s apex bank, CBN, bows to pressure, extends deadline for use of notes

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Nigeria’s apex bank, the Central Bank of Nigeria (CBN) has extended the deadline for the use of the old notes till February 10.

The bank’s governor, Godwin Emefiele, announced the extension in a statement signed on Sunday.

According to the statement, the CBN revealed that it sought approval from President Muhammadu Buhari to extend the deadline for the use of the old notes by 10 days.

“based on the foregoing, we have sought and obtained Mr. President’s approval for the following:  A 10-day extension of the deadline from January 31 to February 10 to allow for the collection of more old notes legitimately held by Nigerians,” the statement read.

Nigeria has been on a recent trend of monetary policy in a bid to rescue its struggling economy. Nigeria’s apex bank recently announced plans to introduce new designs of the N200, N500, and N1,000 notes this month.

“A 7-day grace period, beginning from February 10 to February 17, in compliance with Sections 20(3) and 22 of the CBN Act allowing Nigerians to deposit their old notes at the CBN after the February deadline when the old currency would have lost its Legal Tender Status.”

There has been calls and protests in some quarters for the extension of the deadline for the use of the old bank notes, including allegations by the ruling party presidential candidate, Bola Tinubu that the policy was targeted at him and aimed at sabotaging his election.

 

 

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