International Monetary Fund. Monetary and Capital Markets Department
INTERNATIONAL MONETARY FUND
Nonperforming loans (NPLs) have risen and private sector credit growth has turned negative, due to the severe pressures of 2015-16. The pressures included slower economic growth, sharply lower copper prices, electricity shortages, very tight monetary policy, and mounting fiscal arrears and severe fiscal funding pressures (Figure 1). These pressures have eased considerably in recent months. Monetary policy had contributed to the financial stress by very tight liquidity and use of administrative measures that shifted costs and risks to the banking system. Most of the administrative monetary measures were unwound in November 2016 and monetary policy has been considerably eased since March 2017. Recent good rainfall has eased electricity shortages and a bumper crop harvest is expected. Fiscal funding pressures have only been partly addressed.