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The Covid-19 pandemic prompted the Rwandan state to take a series of fiscal and monetary policy relief measures. With the advent of the new coronavirus, the Rwandan government restructured loans for troubled borrowers to to cushion the shock of the effects of the pandemic on Rwandans. The aim of the Covid-19 emergency loan was to support affected businesses, making it easier for them to refinance existing debt obligations, providing working capital and supporting investments for business adaptation and growth. through the provision of longer-term funding sources. But the country’s central bank has ordered commercial banks to revert to normal regulatory guidelines for restructuring, classification and lending that were previously introduced following Covid-19. In a note dated November 11, the Rwandan Central Bank said that the period for banks to restructure loans from borrowers affected by the Covid-19 pandemic ended in September 2021. According to John Rwangombwa, governor of the said central bank, the suspension of Covid-19 emergency loans aims to avoid moral hazard risks and to ensure the transparency of banks’ balance sheets. “Banks should regularly assess all restructured loans, including Covid-19 restructured loans which may be up to date or still under moratorium,” writes Rwangombwa in his memo. This year, Rwanda is forecasting a strong economic rebound from the 2020 recession, the first in more than two decades. The country’s real gross domestic product (GDP) is expected to grow by more than 6% in 2021, after the contraction of 3.4% last year, thanks to the national vaccination campaign which allowed a gradual recovery of the economic activity. Last week, the central bank kept the key rate, its benchmark lending rate, at 4.5%, predicting that the financial sector would remain stable in the short to medium term.

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