On 10 October in Marrakech, AFI and the Intergovernmental Group of 24 (G-24), the Intergovernmental Group of 24 (G-24) body which coordinates developing countries’ positions on monetary and development issues, held a Central Bank Governors’ Roundtable on the topic of the evolving mandates of central banks. The event which took place during the International Monetary Fund (IMF) and World Bank Group Annual Meetings, explored how financial inclusion contributes to policy objectives in a range of areas, from the development of inclusive innovation to the advancement of social and environmental goals.
Delivering a guest address, Dr Dong He, IMF Deputy Director for Monetary and Capital Markets, emphasized the potential of Central Bank Digital Currencies (CBDCs) to serve financial inclusion. “If designed properly and with similar properties as cash,” Dr He said, CBDCs can be “one of the instruments for digital payments and a pathway for broader access to financial services, including credit, insurance and wealth management.”
During the first session, on how Central Banks can foster inclusive innovation, Governor Jameel Ahmed of the State Bank of Pakistan highlighted the impact of Pakistan’s instant payment system to extend access to digital payments. Maha Bahou, CEO of the Jordan Payments and Clearing Company, explained the impact of digital finance initiatives in Jordan, including a mobile money switch, fintech strategy and fintech hub.
Governor Phil Mnisi of the Central Bank of Eswatini said that deepening financial inclusion, lowering digital payment costs and enhancing cross-border payment options were priorities: “We are reviewing our mandate not just to look at price stability and financial stability, but to also bring in financial inclusion as it contributes to economic growth and development. G-24 Director, Dr Iyabo Masha, who moderated the panel, said innovation in cross-border payments was key “since it can increase the velocity of money, as well as enhancing the total number and volume of transactions.”
Governor Maluke Letete of the Central Bank of Lesotho highlighted the importance of financial literacy and digital ID to overcome challenges of remote access, as well as the potential of CBDC for cross-border remittances. Attendees also heard from the Central Bank of Suriname, which is currently implementing recommendations from AFI and conducting a diagnostic study, and from Bank of Ghana, which has issued mobile money guidelines, set up a regulatory sandbox, piloted a CBDC, and finalised crowdfunding guidelines.
The second session of the Roundtable centred on the role of Central Banks in advancing social and environmental goals. President Douglas Rodriguez of the Central Bank of El Salvador highlighted the bank’s role in promoting gender equity, the national financial inclusion policy, and the country’s policy framework for green finance, the first such in Latin America. “Gender is an integral part of our policy, and the Central Bank of El Salvador is committed to reducing gender gaps in the financial system,” he explained.
Governor Tatafu Moeaki of the National Reserve Bank of Tonga stressed that central banks are in a unique position to influence national stewardship in regard to climate change, and highlighted the triple challenges the country faces of adverse environmental events such as cyclones and volcano eruptions, the impact of the COVID pandemic, and the challenge of imported price inflation. Acting Governor Elizabeth Genia of the Bank of Papua New Guinea set out the urgency of climate change and the importance of financial inclusion as part of a holistic response for vulnerable populations. Finally, Governor Caroline Abel of the Central Bank of Seychelles, set out her view that Central Banks can act on social and environmental issues within their core mandates and existing policy toolkits.
AFI Executive Director, Dr Alfred Hannig, who moderated the session, emphasized the importance of public-private partnerships. He concluded that Central Banks formulate financial inclusion policies that are aligned to social and environmental goals within their mandate of monetary and financial stability, financial integrity, and consumer protection policy objectives. Therefore, such policy responses should not be considered as mission creep.
Concluding proceedings, Mr Chalouho Coulibaly, representing the G-24 Chair Cote D’Ivoire, highlighted the complementarity of financial stability and financial inclusion: “financial stability needs social peace, which needs poverty alleviation, which needs financial inclusion; so, we need to have financial inclusion.”