The Arab Monetary Fund has launched its annual report on its activities during the year 2020, which was approved by the Board of Governors of the Arab Monetary Fund, after reviewing the Fund’s efforts to provide financial and technical support in order to enhance economic and financial stability and achieve comprehensive and sustainable growth in its member states.
The Fund’s Board of Governors was briefed on the efforts made in the field of lending activity for member states in 2020, taking into account the strategic objectives, plans and activities set to achieve them, and the exceptional circumstances imposed by the pandemic crisis (Covid 19). 284.3 million dinars, equivalent to about $ 1.2 billion, to support balance of payments and reform programs in various economic sectors. The fund also agreed to withdraw the payments of loans previously made to its member states, based on the progress of implementing the reform programs supported by these loans, with total withdrawals amounting to about DID 20.2 million, equivalent to about $ 85 million.
The report includes the fund’s activities and the financial position for the fiscal year ending on December 31, 2020, including the financial and technical support it provided to its member states through lending activities, direct and indirect technical aid and advice, and its contributions in the field of studies, reports, bulletins and books, in the economic fields. In addition to its activities aimed at building and developing the capacities of official Arab cadres in central banks, ministries of finance, economy and trade, and national statistical centers, through seminars, workshops and training courses organized by the Fund. The report also highlighted the efforts made by the Fund to support the efforts of its member states during the year 2020 in facing the repercussions of the (Covid 19) pandemic, as the Fund activated simplified and fast procedures in providing loans to support economic, financial and banking reforms programs and confronting imbalances in the balance of payments, as well as providing advice. Technical assistance and training, with an emphasis on policies that directly affect comprehensive and sustainable economic development. The report also included the fund’s activities aimed at increasing levels of financial inclusion, supporting the efforts of the supervisory authorities in the Arab countries to develop the financial sector, and maximizing the benefits of the opportunities offered by modern financial technologies to increase levels of financial services efficiency and access to finance.
The Council also reviewed the Fund’s continuous efforts to support and assist decision-makers and economic policy-makers in the Arab countries during the year 2020 through its publications in specialized economic fields that deal with economic affairs, including the issuance of a set of research, studies, reports, books and statistical bulletins, including ways to support the response Arab member states of the repercussions of the (Covid 19) pandemic, and work paths aimed at mitigating the economic impacts of the pandemic in areas related to the Fund’s work.
The Board also examined the Fund’s efforts in implementing its training programs and activities aimed at enhancing the capabilities of human cadres working in official institutions in the member states, as 30 training courses were held, from which about 969 participants from Arab official competencies have benefited.
With regard to the activities of developing the financial and banking sector in the Arab countries, the report reviewed the activities of the Fund, which focused on strengthening the elements of financial stability in the Arab countries, and providing opportunities for the exchange of experiences and expertise and the transfer of knowledge, in dealing with the challenges that the (Covid 19) pandemic imposed on the sector. Whereas, during the year 2020, the Fund intensified its consultations with policymakers in member countries on the implications of the pandemic.
The Fund also issued a number of guidelines and reference papers with the aim of enhancing knowledge of financial stability issues and supporting digital financial transformation in the Arab countries.
At the level of the Council of Governors of Central Banks and Arab Monetary Institutions and the Council of Arab Finance Ministers, the Council was informed of the Fund’s efforts during the year 2020, aimed at strengthening its pivotal role as a platform for dialogue and consultation between policy makers in member states on the economic and financial implications and the exchange of experiences on appropriate policies. In this regard, the Fund organized in 2020 (35) meetings of committees and working groups, in addition to a number of workshops and dialogue forums that were organized with the participation of a large number of regional and international financial institutions and frameworks. Meanwhile, the Fund organized ten meetings at the level of governors, deputy governors and undersecretaries of finance ministries in Arab countries. The Fund also intensified its communication and cooperation with international frameworks and institutions during the Corona crisis, as the number of international frameworks and institutions, global central banks, development agencies and international organizations that participated in the Fund’s meetings or the Fund’s meetings exceeded 50 parties.
Among the accomplishments discussed in the annual report were the completion of the establishment and operation of the “Bani” platform for Arab payments, the inclusion of major Arab and international currencies, and the commencement of transfer operations where the first transaction was carried out in the UAE dirham, reflecting the Fund’s intensive efforts in cooperation with central banks and Arab monetary institutions, and consultations. With the financial and banking institutions operating in the Arab region, and with the support of a team of specialists, in addition to the great facilities provided by the authorities in the United Arab Emirates, the country of residence, in this regard.
On the other hand, the Board discussed developments in investment activity, as in 2020 the fund continued its approach to pursuing a conservative investment policy and strategy in managing the funds and risks of investment portfolios, which contributed to protecting the invested capital and continuing to achieve positive returns. The activity of the investment fund includes employing its own resources, accepting and investing deposits from member states, and maintaining a high level of funds for this activity, in addition to continuing to apply the decisions of “Basel III” to manage the risks of this activity. On the other hand, the Fund continued its activities in direct investment management of part of the funds of the Arab Trade Financing Program, and the funds collected in the unified account of the specialized Arab organizations, as well as supervising the part managed by external parties in accordance with the investment policy and strategy of each of them.
In terms of the fund’s contributions to developing Arab trade and enhancing the competitiveness of the Arab exporter, the fund continued during the year 2020, through the Arab Trade Financing Program, to provide information and promote Arab goods and commodities, and to provide part of the necessary financing for this trade and its dealers.
The report also included the activities of the fund to support opportunities for Arab economic integration and facilitate Arab payments and linkage with the main trading partners of Arab countries, whether through the efforts undertaken by the Trade Finance Program to encourage Arab trade flows, or by continuing to work on establishing the Arab Foundation for the Clearing and Settlement of Arab Payments. “brouwn”.
In a related development, the Arab Monetary Fund held a “remote” workshop to present the approach proposed by the “Bunaa” platform for Arab payments of the Regional Corporation for Clearing and Settlement of Arab Payments owned by the Fund, to expand the range of innovative services and products, by launching new financial solutions aimed at supporting Business and services for clearing and settling Arab securities transactions, to contribute to linking the Arab financial markets, in a way that enhances the liquidity of the issued financial instruments and encourages Arab and international investments in these instruments.
The workshop was held in cooperation with the Euroclear Foundation, the International Center for the Deposit of Securities. It sheds light on the opportunities available to establish an Arab financial center that serves the region’s needs for integrated stock markets that allow issuers of bonds and sovereign and private debt instruments the ability to reach a wide range of local investors. And international standards, with high efficiency and reasonable cost.
More than 200 participants, representing central banks, financial market authorities, stock exchanges, financial and banking institutions, and financial service providers from the Arab region and the world, participated in the workshop, to closely examine the activities of the Bunaa platform and the development of its business and future plans.
On this occasion, Mahdi Maneh, CEO of the Regional Corporation for Clearing and Settlement of Arab Payments (Bani Arab Payments Platform) said: With the support of the governors of central banks, Arab monetary institutions and the Arab Monetary Fund, Bunaa is looking to expand its innovative services by exploring the potentials and opportunities available to link stock markets. Arab finance across borders to enhance its ability to meet the growing needs, diversify sources and instruments of financing, and enhance opportunities for attracting foreign investments. This ambitious project, which aims to connect the infrastructure of Arab securities in a regional system that enhances the liquidity of the issued financial instruments and opportunities to attract investors to them, comes within the framework of the Arab Monetary Fund strategy to support the development of Arab financial markets and opportunities for financial integration, and coincides with the vision of the Buna platform aimed at developing The financial infrastructure system to contribute to strengthening economic growth and enhancing financial integration at the regional level.
On the other hand, the Arab Monetary Fund issued guidelines on strengthening the supervisory role of central banks in dealing with the risks of non-banking financial institutions in the Arab countries. It must be noted that the application of these principles is subject to the situation of each central bank separately, and its objectives contained in its statute, taking into account the legislative and legal system in each country, and coordination with other supervisory authorities.
The guidelines included a set of recommendations related to the policy of the Central Bank and strengthening its role in assessing the risks of non-banking financial institutions, as it confirms that the Central Bank, in cooperation with the relevant official authorities, develops an accurate definition at the state level of non-banking financial sector institutions that are supposed to be subject to its supervision, and conduct a study An in-depth study on the reality of the sector in the country, to determine its size, nature, and the challenges it faces.
The principles emphasized the necessity to define the supervisory requirements for the non-banking financial sector, including minimum requirements: licensing and branching requirements, governance, capital and liquidity adequacy requirements, compliance and combating money laundering and terrorist financing, replacement and succession plans, disclosure, periodic data and reports, and preparation and approval of approved plans. From the senior management of the Central Bank, on how to implement the tasks of field inspection and office supervision of non-bank financial institutions, and indicators of evaluating their performance.
The principles recommended the importance of financial stability departments in central banks to continuously assess the systemic risks arising from the non-banking financial sector, and to consider establishing appropriate frameworks to expand the database of credit information companies, to include the operations of institutions and companies of the non-banking financial sector.
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