Mauritania: BCM takes stock of the situation

The Monetary Policy Council of the Central Bank of Mauritania held a meeting on Friday, 05/28/2021, under the chairmanship of Mr. Cheikh El Kebir Moulaye Taher, Governor of the Central Bank of Mauritania.
During this meeting, the Council followed a presentation on the analysis of recent developments in national and international economic conditions.
Internationally, the global economic recovery remains dependent on the evolution of the Covid-19 pandemic. The vaccination campaign and the ongoing deconfinement in most developed and emerging countries are raising optimism for a rapid improvement in growth prospects globally. According to the latest IMF forecasts, global growth is expected to stand at 6% in 2021 against a contraction of 3.3% in 2020 while inflation is expected to remain stable in 2021.
At the national level, economic activity was marked, during the first quarter of 2021, by the increase in iron production and good dynamics in the service sector, especially telecommunications. The other sectors, in particular those of gold, copper, fishing and construction “Construction and public works” are still in a slump linked to the effects of the COVID-19 pandemic.
On the monetary level, the situation at the end of March 2021 was characterized by growth in the money supply of 14.4%, year-on-year, supported by the increase in net foreign assets of 65.8% and by net domestic assets of 1.3%.
On the money market, the easing of rates that began in the second half of 2020 continued. For central bank liquidity recovery operations, the weighted average rate is 0.4% in the first quarter of 2021 instead of 2.2% in the fourth quarter of 2020. The monthly weighted average rate on Treasury bills s ‘established at 2.46% in March 2021 instead of 2.97% in December 2020. As for the interbank rate, it remained almost stable, standing at 5.6% in the first quarter of 2021 instead of 5.5 % as of the fourth 2020.
The average lending rate applied by banks to customers also fell slightly during the first quarter, from 11.14% in December 2020 to 10.88%.
As for inflation, it went from 1.8% year-on-year in December 2020 to 2.3% in March 2021. On an annual average, the inflation rate fell from 2.4% to 2.2% over the same period.
In terms of short-term prospects, the national economy is expected to register a recovery in economic activity with growth projected at 3.1% in 2021 and inflation expected to remain below 3%.
On the basis of the analyzes carried out, the Council decided to maintain unchanged the current stance of monetary policy while continuing to closely monitor the implications of the covid-19 crisis on the national economy and the financial system with a view to take, if necessary, the necessary measures to deal with it.