The African Export-Import Bank (Afreximbank) has launched a US$3.5 billion trade finance package that includes letters of credit (L/Cs) and guarantees to help member countries adjust to prevailing adverse economic shocks.

The Counter-Cyclical Trade Liquidity Programme (CCTLP) responds in particular to commodity price and terrorism-induced economic shocks.

Two-year arrangement

Approved by the Afreximbank board earlier this month, the programme is for an initial duration of two years during which the bank will deploy up to 40 per cent of its approved annual gross commitment limit to providing trade finance liquidity.

Beneficiaries of CCTLP support would be central banks and selected commercial banks in eligible countries.

Funding availability

Afreximbank says it has available funding for 2016 totalling some US$3.5 billion.

The bank plans to attract other lenders and financiers to the programme, with the aim of more than doubling the available funding.

Practical help

The programme will provide unfunded facilities by way of guarantees, L/Cs and similar instruments, to commercial banks in eligible concerned countries.

It will also make funded facilities available to enable them to meet obligations under trade finance payment rights that fall due but which they are unable to meet due to non-availability of foreign exchange from their central banks or usual markets.

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