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Algeria banks to defer payments for coronavirus hit firms

The Bank of Algeria [Twitter]
The Bank of Algeria [Twitter]

Algerian banks will defer or reschedule loan payments for firms which have been financially affected by the coronavirus crisis, the country's central bank said today, Reuters reports.

Banks will continue to finance customers benefiting from loan payment deferrals, while reducing their minimum liquidity requirement to raise funding levels, it said a statement.

The coronavirus crisis comes on top of an oil price crash that is draining Algerian finances, which rely heavily on energy export revenues, and follows a year of political turmoil.

President Abdelmadjid Tebboune said last month that he would cut planned public spending this year by 30%, delaying several economic and social projects aimed at reviving the economy.

READ: Algeria extends curfew as coronavirus cases rise

He also ordered state energy firm Sonatrach to halve planned investment spending to $7 billion, just three months after the government approved a new energy law aimed at boosting investment by offering incentives to foreign companies.

The step taken by the central bank may help companies to ease the financial pressure, analysts said.

"This is a very important measure to avoid bankruptcy for many firms," economist and parliament finance committee member El Houari Tighersi told Reuters. "The government also needs to provide loans with zero interest in these circumstances."

The central bank said it was ready to take more steps to help businesses get through the crisis.

READ: Algerian president pardons over 5,000 prisoners

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