March 13, 2020 / 1:25 PM / a month ago

UPDATE 1-Mauritius central bank pumps in liquidity to support businesses

(Adds details)

NAIROBI, March 13 (Reuters) - The Bank of Mauritius said on Friday it will offer 5 billion rupees ($130 million) in liquidity support to businesses through commercial banks, to cushion firms from the impact of the coronavirus pandemic.

Although the Indian Ocean island economy has not reported any cases of the new coronavirus, policymakers have already started taking aggressive action to support its tourism and financial services-dependent economy, cutting the benchmark lending rates by 50 basis points on Tuesday.

The bank said interest on the loans offered through the new special credit facility will be capped at a fixed rate of 2.5% per year. It also reduced the cash ratio reserve requirements for banks to 8% from 9% to boost lending.

The new lending facility will be made available from March 23 through to the end of July, the central bank said, adding that the funds will go to all sectors affected by the impact of the virus.

It also ordered banks to stop taking capital repayments for existing loans for businesses hit by the impact of the pandemic.

The regulator relaxed certain requirements on credit impairment reporting for banks that came into effect this January, adding that it will offer a two year, Bank of Mauritius savings bond worth 5 billion rupees on March 23. ($1 = 38.1500 Mauritius rupees) (Reporting by Duncan Miriri; Editing by Catherine Evans and Toby Chopra)

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