Through a scheme funded by the UK Government, Bank of England staff are sharing UK expertise on forecasting, managing and mitigating the economic and financial shock caused by the pandemic.
With the impact of coronavirus varying around the world, the Bank of England has tailored its approach to the specific challenges faced by individual countries. For example, work with the South African Reserve Bank and the 15 central banks in the South African Development Community has focused on developing a crisis management framework to respond to commercial banks at risk from adverse economic impacts.
Bank of England experts have supported other central banks, including in Sierra Leone and Ghana, on internal risk management, assessing risks to the banking sector and developing foreign currency markets which would help reduce the risk of sharp rises in import prices and spiralling inflation including of food.
International Development Secretary Anne-Marie Trevelyan said: “The global economic impact of coronavirus has shown us that financial stability here in the UK relies on other countries having stable economies. This innovative partnership with the Bank of England is using British expertise to protect UK firms and consumers, while helping developing countries build back better and become more self-sufficient.”
Andy Haldane, Chief Economist at the Bank of England, said: “In these turbulent economic times, it is more vital than ever that central banks can learn from one another. I’m delighted that the Bank of England with support from DFID can play its part in organising and facilitating high quality technical co-operation with a range of partner countries around the world.”
This activity is part of an ongoing partnership between the Department for International Development (DFID) and the Bank of England to provide technical assistance on the monetary, economic and financial policy issues faced by central banks. The Bank of England has increased the number of central banks it supports due to the impact of coronavirus, and the existing programme will run until 2022.
Seventeen developing market central banks from Africa and Asia have participated in the webinar series and the Bank of England is continuing its bilateral work with 10 central banks, including from Indonesia, Ghana, Morocco and South Africa.
The Bank of England and DFID also provide funded access for those working in developing economy central banks to an online distance learning MSc in Global Central Banking and Financial Regulation. This is an online qualification developed by the Bank of England and Warwick Business School aimed at the global central banking community and other finance professionals.
Dr Frank Prah, Economist at the Bank of Ghana said: “Since COVID-19 began to have a toll on the economies of the world, many analysts have tried to trace and aggregate the potential effects of the pandemic on the economy.
“I was very impressed by the fact that participants could generally identify with the postulated transmission mechanism of the impact of COVID-19 on the economy, irrespective of whether their economies are well integrated to the rest of the world nor the level of economic advancement of their countries. As an Economist in an inflation targeting Central Bank, I think the workshop was very timely and useful because the analytical tools discussed should be helpful for revising not only the existing forecasting regime but also for anticipating the likely medium to long term impact of the pandemic on key economic variables.”