Communiqué of the 92^nd Meeting of the Monetary Council of the Eastern Caribbean Central Bank

The Ninety-Second Meeting of the Monetary Council of the Eastern Caribbean Central Bank (ECCB) was held via videoconference at the ECCB Headquarters, Basseterre,
St Kitts and Nevis, on 16 November 2018, under the chairmanship of Dr The Right Honourable Keith Mitchell.

1.0  Monetary Stability

Council received the Governor’s Report on Monetary and Credit Conditions in the Eastern Caribbean Currency Union (ECCU).  The report outlined the recent trends in monetary and credit conditions as at 30 June 2018, against the backdrop of global economic and financial developments and within the context of the Bank’s broader objectives of ensuring the stability of the exchange rate and the financial system.

Council was apprised of the following:

• Monetary and Credit conditions in the ECCU banking system showed a slight deterioration as at the end of June 2018 when compared with the same period in the previous year, but remained favourable.
• The Currency Union’s exchange rate arrangement continued to be well supported by an adequate level of foreign currency reserves.
• The backing ratio stood at 97.5 per cent, which was notably above the operational (80 per cent) and statutory (60.0 per cent) limits.
• Private sector credit from banks rose by 0.4 per cent ($40.4m) mainly on account of 9 per cent ($32.4m) increase in credit to private businesses.
• Global growth projections have been revised slightly downward to 7 per cent for both 2018 and 2019 compared with 3.9 per cent in the IMF’s World Economic Outlook April 2018 projections.
• US growth is expected to remain robust at 2.9 per cent in 2018, supported by the recent fiscal stimulus. However, the forecast is for slower growth in 2019 as the stimulus of the tax cuts fades.

• Downside risks had strengthened in recent months including:
  1. Escalating global trade tensions;
  2. Tightening of financial conditions particularly in emerging markets;
  3. Rising oil prices; and 
  4. Climate Change.

Following deliberations on the state of monetary and credit conditions, Council agreed to maintain the Minimum Savings Deposit Rate at 2.0 per cent and the Central Bank’s discount rate at 6.5 per cent. The Minimum Savings Rate is the lowest rate that commercial banks can offer on savings deposits.  The Central Bank’s Discount Rate is the rate at which the ECCB lends to commercial banks and governments.

2.0  Financial Stability

Council was informed that as at 30 June 2018, the ECCU commercial banking sector was assessed as stable when compared to the previous quarter’s performance.  Council noted that:

• Total assets decreased by 0.26 per cent ($80.4m) to $30,701.4m;
• Deposits decreased by 0.22 per cent ($46.6m) to $21,530.8m; and
• Loans and advances recorded a nominal increase of 0.12 per cent ($14.3m) to $12,223.0m.

With respect to the Credit Bureau, Council was informed that the Credit Reporting Legislation had been already passed in four member countries: Antigua and Barbuda, Grenada, St Kitts and Nevis and St Vincent and the Grenadines.

Furthermore, an operator for the credit bureau has been selected and should be licensed by year end.  The Credit Bureau for the ECCU is expected to become operational in the second half of 2019.

Council received a paper on the establishment of Deposit Insurance Fund in the ECCU to further protect depositors.

3.0  Fiscal and Debt Sustainability

Council also noted that the ECCU Debt to GDP ratio continued its downward path to the target of 60 per cent and currently stands at 69.5 per cent.

4.0  Growth and Competitiveness

As it relates to growth, Council noted that ECCU growth was projected to accelerate to 2.9 per cent in 2018 and 3.8 per cent in 2019 after the growth setback caused by the devastating hurricanes in 2017.

With respect to the challenges experienced by St Vincent and the Grenadines pertaining to the payment to traders selling agricultural produce in Trinidad and Tobago, Council welcomed the solution reached between the ECCB and the Central Bank of Trinidad and Tobago (CBTT).  The solution will facilitate trade of agricultural produce from St. Vincent and the Grenadines to Trinidad by making it easier for certified traders in St Vincent and the Grenadines to exchange TT dollars for EC dollars.  Council noted that the ECCB and the CBTT had agreed to pilot the solution using the bank of St Vincent and the Grenadines Limited as the intermediary.

Council discussed ways to strengthen statistics in the ECCU including the modernisation of Statistical Acts; increased use of ICT in statistics; and development of Tourism Satellite Accounts

5.0  Report from the Technical Core Committee on Insurance (BAICO and CLICO)

Council was apprised that distribution to creditors under the Plan of Arrangement and the Annuity Relief Program continued. A second distribution of approximately EC$35M is being planned to be paid by end of 2018.

6.0  Date and Venue of 93^rd Meeting of the Monetary Council

Council agreed to the convening of the 93^rd Meeting of the Monetary Council on Friday, 15 February 2019 in St Kitts and Nevis.

7.0  Attendance

Council Members who attended the meeting were:

1. Dr The Right Hon Keith Mitchell, Prime Minister and Minister for Finance, Grenada (Chairman)
2. The Hon Victor F Banks, Chief Minister and Minister for Finance, Anguilla;
3. The Hon Roosevelt Skerrit, Prime Minister and Minister for Finance, Commonwealth of Dominica;
4. The Hon Donaldson Romeo, Premier and Minister for Finance, Montserrat;
5. Dr the Hon Timothy Harris, Prime Minister and Minister for Finance, St Kitts and Nevis;
6. Hon Allen Chastanet, Prime Minister and Minister for Finance, Saint Lucia;
7. The Hon Camillo Gonsalves, Minister for Finance, St Vincent and the Grenadines; and
8. The Hon Lennox Weston, Temporary Alternate, Antigua and Barbuda.

16 November 2018

The Eastern Caribbean Central Bank (ECCB), in collaboration with the Regional Security System Asset Recovery Unit (RSS ARU), announces the launch of the ECCB Creative Youth Competition.

The ECCB Creative Youth Competition is designed to allow students to demonstrate their creativity and critical thinking skills through various genres including: essay writing, poetry, song writing and art. The competition is opened to students aged 13-19 in the eight ECCB member countries.

This year, the competition will focus on essay writing. Students who wish to participate will be required to write on one of the following topics:

1. Towards a cashless society: challenges, opportunities and the realities for the Eastern Caribbean Currency Union.
2. For the Eastern Caribbean Currency Union to become economically viable, we must strive towards financial sustainability through technology. Discuss.

The topics were selected in collaboration with secondary school teachers across the ECCB member countries.

The essays will be judged in two categories: ages 13 to 16 and 17 to 19, and will be assessed for content, soundness of points, logical development, knowledge of the subject, command of language and presentation.

Cash prizes, tokens and trophies amounting to $20,500.00 will be awarded to the top three winners and their respective schools and mentors.

The essays for the 2018-2019 ECCB Creative Youth Competition must be submitted to the ECCB Headquarters or the Bank’s Agency Office in the respective member countries, no later than 31 January 2019.

Click Here for more information

About the Eastern Caribbean Central Bank and Regional Security System Asset Recovery Unit

The Eastern Caribbean Central Bank (ECCB) was established in October 1983. The ECCB is the Monetary Authority for: Anguilla, Antigua and Barbuda, Commonwealth of Dominica, Grenada, Montserrat, St Kitts and Nevis, Saint Lucia and St Vincent and the Grenadines.

The Regional Security System Asset Recovery Unit (RSS ARU) was created out of a need for a collective response to security threats, which were impacting on the stability of the region in the late 70’s and 80’s.

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Media Contact: Ingrid O’Loughlin, Senior Director, Corporate Relations Department

Phone: (869) 465-2537 | Fax: (869) 465-9562

E-mail: info@eccb-centralbank.org | Website: www.eccb-centralbank.org

Securities Issue on RGSM Increase

The number of securities issued on the Regional Government Securities Market (RGSM) during the first eight months of 2018 was on par with the record number of 59 recorded in 2017.

That was one of the key messages from the report on the performance of the RGSM for the period January to August 2018, presented to the Regional Debt Coordinating Committee (RDCC) at its meeting on 4 October.

The RDCC, which has direct oversight of the RGSM, recognises the increased interest of residents in the Eastern Caribbean Currency Union (ECCU) in the RGSM.  The RDCC noted that investors demonstrated strong support for government bonds as the participating governments issued six bonds in the first eight months of 2018 compared with two for the same period in 2017.

The RDCC is of the view that the increased issuance of bonds is consistent with the goals of the Medium Term Debt Management Strategy to increase the average time to maturity of the public debt which in turn reduces the risks in the debt portfolio.

The RDCC reported that government securities continue to provide an attractive option for residents seeking to increase returns and/or diversify their investment portfolios.  Over the period January to August 2018, the average rate on short term securities ranged from 2.5 per cent to 4.0 per cent, while rates on longer term securities ranged from 5.5 per cent on two-year bonds to 7.3 per cent on 10-year bonds.

The RDCC comprises senior officials from the Ministry of Finance of the eight ECCB member governments and the Governor of the Eastern Caribbean Central Bank.

Media Contact: Ingrid O’Loughlin, Senior Director, Corporate Relations Department

Phone: (869) 465-2537 | Fax: (869) 465-9562

E-mail: info@eccb-centralbank.org | Website: www.eccb-centralbank.org

ECCB Governor Named Central Bank Governor of the Year, Caribbean

Governor of the Eastern Caribbean Central Bank, Timothy N. J. Antoine has been named Central Bank Governor of the Year, Caribbean by GlobalMarkets.

GlobalMarkets is the featured newspaper for the meetings of the International Monetary Fund (IMF)/World Bank, European Bank for Reconstruction and Development, Asian Development Bank and Inter-American Development Bank.

GlobalMarkets recognises the accomplishments of the world’s outstanding policymakers during its annual awards event. Awards are presented for Finance Minister of the Year and Central Bank Governor of the Year, for each region of the world as categorised by the IMF/World Bank.

This year’s award ceremony was held on 12 October in Bali, Indonesia and formed part of the events for the 2018 Annual Meetings of the IMF/World Bank and the Commonwealth Central Bank Governor’s Meeting which Governor Antoine chaired.

In receiving the Central Bank Governor of the Year, Caribbean award, Governor Antoine said that he “humbly accepted the award in the name and on behalf of the people of the Eastern Caribbean Currency Union (ECCU), whom he had the great privilege and honour to serve”.

Governor Antoine also acknowledged the invaluable contribution of the ECCB Monetary Council, the ECCB Board of Directors and the Bank’s management and staff, stating that the award could not have been achieved without their support. The award, he said, “will really encourage us and energise us to continue the work for the people of the region and for all small states across the world”.

On return to office, Governor Antoine remarked, “the work that we do is driven by our passion to serve and make a difference, not by our desire for recognition; however, we are extremely gratified by this global recognition and prestigious award”.

Media Contact: Ingrid O’Loughlin, Senior Director, Corporate Relations Department

Phone: (869) 465-2537 | Fax: (869) 465-9562

E-mail: info@eccb-centralbank.org | Website: www.eccb-centralbank.org

October is Financial Information Month in the Eastern Caribbean Currency Union.

The theme for Financial Information Month (FIM) is: Financial Empowerment Through Education.  FIM is a regional financial, economic, business and entrepreneurial education campaign that has been executed in the Eastern Caribbean Currency Union (ECCU) since 2002.  The month forms part of an ECCU financial and economic education programme which the ECCB coordinates in collaboration with ECCU member governments, financial and academic institutions, the media, other private and public sector institutions and community-based groups. The programme incorporates a series of initiatives designed to support the attainment of the goal of “a financially developed and vibrant ECCU region that fosters strong and sustainable economic growth and the improved well-being of the citizenry.”

The area of focus for FIM 2018 is: Conducting and Protecting Your Business in a Digital Environment.  The activities will concentrate on the following sub-themes:

• From standing in line to going online – providing information about online services offered by financial institutions and other agencies e.g., government e-services;
• New Currency: Cryptocurrency, Bitcoins, Digital Wallets…Are We Ready? – examining the required infrastructure, impact on the ECCU payments system, legal framework requirements/implications, regulation and supervision;

• Cyber security: use strong protection every time – advising the public on how to protect themselves from identity theft, online fraud and the proper use of ATMs; and
• Restructuring and transforming your business to take advantage of opportunities in the digital environment – highlighting how businesses can use technology to advance their operations, the importance of intellectual property rights for producers of digital works, how artistes/artisans can reap maximum financial gains from creative work.

Check the FIM Facebook page for daily updates on the activities taking place across the Eastern Caribbean Currency Union: https://www.facebook.com/FinancialInformationMonthECCU/ 

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 Media Contact: Ingrid O’Loughlin, Senior Director, Corporate Relations Department

Phone: (869) 465-2537 | Fax: (869) 465-9562

E-mail: info@eccb-centralbank.org | Website: www.eccb-centralbank.org