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MEFD March 2020

Published: Monday May 4th, 2020

During the review month, developments in the domestic economy were dominated by the Novel Coronavirus (COVID-19) pandemic. Globally imposed travel restrictions related to COVID-19 adversely impacted tourism output, as both the high value-added air segment and sea traffic ground to a halt. While the construction sector was undergirded by ongoing foreign investment projects and hurricane rebuilding efforts, these also paused as the Emergency Powers (COVID-19) Order, 2020, imposed a lockdown of the country. On the monetary front, bank liquidity contracted over the review period, as the expansion in domestic credit outpaced the rise in the deposit base. Further, external reserves grew, albeit a slowdown from the prior month, buoyed by net foreign currency inflows from re-insurance receipts. The Central Bank's policy posture, meanwhile, shifted to promoting credit forbearance for borrowers displaced by the pandemic and to managing foreign exchange market stability.

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