- February 16, 2024
- Posted by: admin
- Category: Current News
MEFMI conducted the first pilot of ICRAT Version 2 deployment in an in-country mission at the Bank of Tanzania (BOT). The mission was held at the Bank of Tanzania Sub-Head Office in Zanzibar on 4 – 8 September 2023.
The objectives of the mission were to install the upgraded ICRAT (V2) tool, train BOT staff on the system requirements, data sources, system set-up and configuration, data downloads, models, report generation and interpretation of results and obtain feedback, resolve any issues and consider recommendations to improve the tool.
As part of its capacity-building interventions, MEFMI develops scalable and customizable tools which support member countries in their efforts to develop and adopt sound practices in macroeconomic and financial management. In this regard, MEFMI developed the Internal Credit Rating Analysis Tool (ICRAT) in 2015/2016 as part of ongoing efforts to support managers of foreign exchange reserves to establish and strengthen internal credit risk assessment practices. Since its commissioning, the tool has been deployed in 10 MEFMI member countries.
The tool was upgraded to make it more robust to respond to the users’ needs. The objectives of the upgrade were to broaden the data sources, increase the data processing capability, facilitate the execution of complex calculations and algorithms without affecting the speed of computation and improve functionality in terms of handling multiple currencies, more counterparties and a wider maturity spectrum as well as provide for composite ratings.
A total of 13 officials participated in the mission. The officials included staff from risk management, portfolio management, internal audit, and IT departments of the Bank of Tanzania. Participants and members of the ICRAT Technical Working Group (TWG) from 2 other Central banks; the Bank of Botswana and the Central Bank of Eswatini also attended the mission to gain experience on the deployment of the ICRAT V2 in anticipation of the deployment of the same tool in their respective countries soon. In terms of gender distribution, there were 4 female participants and 9 male participants.
The mission was implemented successfully since the upgraded ICRAT was installed at BOT. The mission enhanced participants’ knowledge of system set-up and configuration, system models and credit risk signals, data sources and data upload, report generation and interpretation and overall credit risk assessment. Feedback was obtained from the issues encountered and observations made during the sessions which will be considered to further improve the tool before it’s rolled out to other MEFMI member institutions.