Financial Crime World

Mauritania’s Financial Institutions Face Compliance Audits as Banking Sector Recovers from COVID-19 Shock

Nouakchott, Mauritania - A New Challenge for Financial Institutions

As Mauritania’s economy gradually recovers from the devastating effects of the COVID-19 pandemic, financial institutions in the country are facing a new challenge: compliance audits. The Mauritanian banking system has been under scrutiny due to its informal nature and limited access to domestic credit.

Progress and Challenges in the Banking Sector

Efforts by the International Monetary Fund (IMF) have led to greater stability in the sector, with interest rates declining from 30% in 2000 to 10% in 2018. However, Mauritania’s financial institutions are still grappling with liquidity constraints and fiscal consolidation measures. The country’s five largest banks, which hold a combined reserve of $100 million, have been struggling to maintain stability amid the economic downturn.

Compliance Audits: A Step Towards Greater Transparency and Accountability

The Central Bank of Mauritania is conducting compliance audits as part of efforts to streamline the financial sector’s compliance with international standards. The Ministry of Finance has mandated that the Central Bank perform yearly audits of Mauritanian banks to ensure transparency and accountability.

Foreign Exchange Controls: Tightening Regulations

Foreign exchange controls have also been tightened in recent years, with the Central Bank significantly reducing direct foreign currency sales to the private sector. This move aims to enforce foreign exchange regulations and allow for a more flexible determination of the exchange rate.

  • Investors are guaranteed the free transfer of convertible currencies at the legal market rate, subject to availability.
  • Foreigners working in Mauritania may face complications when withdrawing money due to strict regulations.
  • The local currency, the Ouguiya, is freely convertible within Mauritania but its exportation is not legally authorized.

Improving Compliance with International Standards

Despite these challenges, Mauritania’s financial institutions are working to improve their compliance with international standards. With the help of organizations like the IMF, the country is taking steps towards greater stability in its banking sector.

A Positive Development: Maintaining Correspondent Banking Relationships

In related news, Attijari, a local bank, maintains a banking relationship with U.S. banks, ensuring continued access to international financial markets. This positive development is a testament to the efforts of Mauritanian financial institutions to improve their compliance and maintain relationships with foreign partners.

Conclusion

As Mauritania’s economy continues to recover from the pandemic, its financial institutions face new challenges and opportunities. Compliance audits will play a crucial role in ensuring transparency and accountability within the sector. With continued support from organizations like the IMF, Mauritania can work towards greater stability and growth in its banking sector.