European crisis expected to contaminate retail banking in Cape Verde

9 November 2011

Praia, Cape Verde, 9 Nov – The European crisis is expected to have a “contagious” effect on the retail banking business in Cape Verde as it will affect loans and credit lines that have been granted to the archipelago, the chairman of Banco Comercial do Atlântico (BCA) said in Praia Tuesday.

Joaquim de Sousa, chairman of BCA, a bank linked to Portuguese state financial group Caixa Geral de Depósitos (CGD), noted that the Cape Verdean economy could become contaminated due to its relationship with some European counterparts experiencing a crisis, “and thus it is subject to the influence,” of what is happening outside the country.

Sousa was speaking at the end of a meeting of the Cape Verdean prime minister with directors of the retail banks operating in Cape Verde, as part of the consultation of economic, social and religious partners that José Maria Neves is carrying out ahead of the Social Contract Council (CCS) set for the 15 November.

In its turn, the Bank of Cape Verde (BCV) Tuesday recommended, in its monetary policy report, moderation in making use of domestic loans in order to stabilise reserves without affecting funding of the private sector.

The governor of the BCV, Carlos Burgo, noted that, in relation to public debt, Cape Verde was a “low risk” country, but noted that the country was getting closer to a level of moderate risk, which in his opinion meant that debt and investment policy had to take the added risk into account.

Projections from BCV point to slowed economic growth in the final quarter of 2011 and in 2012. (macauhub)