When the Minister of Finance, Neal Rijkenberg, delivered his Budget Speech for 2022/23, he reassured Parliament and the nation that the financial sector remained resilient to the economic disruptions associated with the COVID-19 pandemic. This was despite the pandemic continuing to present a challenging operating-environment for the banking sector, he said - wherein credit and operational risks to financial stability remain elevated – and was largely made possible by monetary and macroprudential policy measures. Minister Rijkenberg detailed how the pandemic’s adverse effects on domestic economic activity had affected the financial condition of households and businesses, with a knock-on effect on credit, liquidity and operational risks in the banking system.
Continuing, he explained that the Central Bank of Eswatini (CBE) had decisively intervened with monetary and macroprudential policy measures aimed at safeguarding financial system stability, as well as supporting economic recovery. Measures were implemented to alleviate the impact of the pandemic on Supervised Financial Institutions, such as giving permission to these institutions to grant credit relief to borrowers affected by the pandemic, reducing the minimum liquidity requirements by five percent for all banks that may come under liquidity distress, enabling the deferral of the payment of dividends, and promoting the utilisation of digital and cashless payment platforms. Consequently, the measures supported the banking sector in building up and maintaining ample capital and liquidity buffers, over and above the statutory minimum requirements, to cushion them against emerging risks during the pandemic period. The Minister asserted that “this provides for confidence and certainty in our economy, as the CBE stands ready to take action in order to address any emerging risks to financial sector stability.
