The Arab Monetary Fund (AMF), in the context of its role as the technical secretariat of the Council of Arab Central Banks Governors, has organised an exceptional virtual meeting with the council members to discuss economic implications of the coronavirus pandemic on Arab countries. The meeting witnessed the participation of senior officials from the International Monetary Fund and the World Bank.
In a Monday statement, the AMF said the meeting came at a time when the coronavirus continues to spread worldwide, and the economic, social, financial, and banking risks and repercussions are increasing. This has added additional unexpected burdens and pressures to the supervisory and regulatory work. It has prompted the authorities in every country to take measures and precautions to limit the negative impact of the pandemic on the financial and banking sectors.
The meeting discussed the pandemic’s threat to financial stability, according to three scenarios; that the crisis would continue until the end of the first half of 2020, it would last through the end of the year, or it would carry into 2021.
In the same context, a number of important issues were discussed, including challenges that might face the economic and financial reform in Arab countries, situation of investment flows into Arab countries, and impact of global market fluctuations on economic and financial stability.
The discussion also touched on the main systemic risks that threaten financial stability at this stage. It also addressed the ways and means to protect and encourage the productive sectors in the next stage. Furthermore, it addressed the impact of the virus on the application of Basel III regulatory framework and the International Financial Reporting Standards (IFRS 9).
Arab central banks governors also discussed efforts to promote financial inclusion and support the transition to digital financial services. They also discussed the proper mechanisms to support and protect micro, small, and medium enterprises and consumers of financial services, ways to upgrade the digital identity and electronic databases, and application of open banking. The attendees highlighted the risks and challenges that may arise from modern financial technology in the next stage.
Abdulrahman Bin Abdullah Al Hamidy, Director General and Chairperson of AMF, pointed out that holding this extraordinary meeting came to confirm that maintaining financial stability in the Arab countries is one of the priorities of Arab central banks and monetary institutions, given that it is linked to economic and social stability in the region.