LatinNews Daily - 03 August 2020

* The president of Honduras’s central bank (BCH), Wilfredo Cerrato, has revised the country’s 2020 GDP growth forecast, altering the predictions from a decline of between 2.9% and 3.9% predicted in May, to a contraction between 7% and 8%, due to the impact of the coronavirus (Covid-19) pandemic. Cerrato added that since Honduras went into quarantine in March, activity in the hotel and gastronomy sector has decreased by 41%, and activity in the industrial manufacturing sector has fallen by 21.2%, compared with the same period in 2019. To mitigate the economic effects of the pandemic, the BCH will reduce the monetary policy rate by 75 basis points to 3.75% from August onwards, and reduce interest rates on credit discount windows for the financial system, reducing the rate from 5% to 4.25% for standing credit facilities. The BCH predicts that this will signal “more flexible financial conditions in the market”, which will “favour the resurgence of investment and consumption” as Honduras’s economy reopens. 

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