Gov’t covid19 economic bailout to cost $6b

The government’s coronavirus social and economic relief and stimulus plan will cost an estimated $6 billion, the Prime Minister said Friday. At a media briefing at the Diplomatic Centre, Dr Rowley said there was a limit to what the government can do regarding financial intervention. The government had to find resources and found as much as it could.

“Six billion dollars is what we had not catered for three months ago but we have to use it now and we are focusing on those people who are least able to look after themselves.” The Prime Minister had previously said the government would have to use funds from the Heritage and Stabilisation Fund (HSF) to help mitigate the economic impact. In Senate Friday, Leader of Government Business, Camille Robinson-Regis, said legislation to amend the HSF Act will be brought to Parliament on Wednesday.

On Thursday, commercial banks started amending their interest rates and offering deferrals for loans and mortgages, in keeping with covid19 economic policy announcements made by the government on Wednesday. On Tuesday, the Central Bank, also in response to the covid19 precautions, lowered the repo rate to 3.5 per cent and lowered the reserve requirement to 14 per cent, in order to lower lending rates and increase liquidity in the financial system.

In a statement, the Bankers’ Association (BATT) outlined its members’ response to the government’s call to action to mitigate the economic burden on citizens in the face of the covid19 pandemic. The measures, BATT said are aligned to our collective responsibility as a society to protect our employees, our clients, business and ultimately our country.

Banks will all be reducing their prime lending rate by at least 1.5 per cent following the reduction in repo rate. This reduction will reduce the interest cost for all clients whose loans are re-priced on prime. For varying loan types for both businesses and individual, some deferral of interest and/or principal payments will be considered by banks for at least one month. Arrangements will vary by institution and by type of loan. Consideration is being given by banks to temporarily reducing the rates on credit card balances. “The focus at this time is to assist customers in meeting their critical, immediate and short-term needs, to weather this global pandemic. Each Bank will customise and roll out the solutions to their individual clients. BATT will continue to work to monitor and co-ordinate the sector response in the best interest of the national economy,” BATT said.