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HomeNewsCaribbean NewsEncouraging economic developments at 107th meeting of ECCB Monetary Council, says PM...

Encouraging economic developments at 107th meeting of ECCB Monetary Council, says PM Pierre

By Caribbean News Global fav

ST KITTS / ST LUCIA – The 107th meeting of the Monetary Council of the Eastern Caribbean Central Bank (ECCB) was held on 16 February 2024, at the ECCB Campus in Saint Christopher (St Kitts) and Nevis, under the chairmanship of Camillo Gonsalves, minister for finance of Saint Vincent and the Grenadines, received the Governor’s Report on the monetary, credit and financial conditions in the Eastern Caribbean Currency Union (ECCU) from ECCB Governor, Timothy N. J. Antoine.

The Governor’s Report entitled, The Big Push: Implementation for Impact in an Era of Elevated Uncertainty, included an analysis of the monetary conditions, financial stability and macroeconomic developments in the ECCU.

Prime Minister, minister for finance, economic development and the youth economy and minister for justice and national security, Philip J. Pierre, and former chairman of the 105th ECCB, reference ‘ the ECCU encouraging economic developments.’

The ECCB is the Monetary Authority for a population of more than 600,000 people spanning six sovereign states: Antigua and Barbuda, the Commonwealth of Dominica, Grenada, Saint Christopher (St Kitts) and Nevis, Saint Lucia, and Saint Vincent and the Grenadines, and two overseas territories of the United Kingdom: Anguilla and Montserrat.

“The Governor’s Report indicated that the ECCU is on course for positive GDP growth in 2024 following an improved fiscal performance in 2023. Monetary, credit and financial conditions in the ECCU remain stable. The Governor’s Report confirms the ECCU banking system remains resilient and stable.”

“On the recommendation of the Governor, the Monetary Council agreed to (1) Maintain the Minimum Saving Rate at 2 percent; and (2) Maintain the Discount Rate at 3 percent for short-term credit and 4.5 percent for long-term credit.”

IMF staff statement of the 2024 Article IV Mission – ECCU

“The Eastern Caribbean Currency Union (ECCU) has undergone a strong rebound, led by tourism and investment, and supported by policies that helped moderate the impact from successive external shocks.

“With output having recovered to its pre-pandemic level, economic policies should shift toward addressing structural constraints to sustainable and resilient growth and supporting continued robustness of the quasi-currency board, which has served the currency union well.

“Priorities include safeguarding macroeconomic stability and fiscal space for growth-enhancing physical and social investments, strengthening balance sheets and oversight in the financial sector, supporting local private sector development and investment, and improving the labor market. Strengthening data collection, quality, and transparency is critical to informing a well-calibrated policy design.”

Prime Minister and Minister for Finance, Pierre, cited key indicators by the International Monetary Fund (IMF) forecast in its January 2024 World Economic Outlook Update that global GDP is likely to grow 3.1 percent in 2024, unchanged from 2023. Here in the ECCU, the growth outlook is positive, the economy continues to expand and inflation is abating. Implementing strategic reforms is key for building resilience and elevating the growth trajectory. The current backing in respect of foreign reserves is 95.13 percent (as at 09 February 2024), up from 94.8 percent which was reported at the 106th meeting held on 24 November 2023.

On financial stability, the ECCU banking system remains resilient and stable, with a high degree of liquidity. Capital buffers remain at robust levels. Although, financial sector stability has been maintained, vulnerabilities persist. The Non-Performing Loans (NPL) ratios of commercial banks and credit unions remain elevated at 12.2 percent and 7.8 perent, well above the 5.0 percent benchmark.

Fiscal performance improved in 2023 in tandem with the economic recovery, placing the ECCU back on the path towards debt sustainability. The growth outlook remains positive across the board in the ECCU, with tourism expected to continue leading the economic recovery throughout 2024, as it did in 2023.

Promoting economic growth, and fostering financial resilience, Prime Minister Pierre, said previously “the people of the region will continue to rely on the ECCB as they navigate the ever-changing landscape of financial and economic development.”

IMF committed to supporting ECCU member countries

On 1 October 1983, the East Caribbean Currency Authority (ECCA) was upgraded to a Central Bank – the ECCB. October 1965 to July 1976, the EC Currency was pegged to the pound sterling at a rate of EC$4.80 to £1.00. In July 1976, the peg was transferred to the US dollar at a parity of EC$2.70 to US$1.00.

The Eastern Caribbean Central Bank (ECCB) has been diligently fulfilling its mission of “Advancing the good of the people of the Currency Union” by maintaining monetary and financial stability and promoting growth and development.”

“Bank of Saint Lucia on the launch of its mutual fund for the citizens and residents of the Eastern Caribbean Currency Union (ECCU), styled BOSL Global Investment Fund. Indeed, with this launch, Bank of Saint Lucia has become the first indigenous bank in the Eastern Caribbean Currency Union so to do. This is most appropriate. After all, Saint Lucia is our largest member country and has the largest economy in the ECCU. Furthermore, Bank of Saint Lucia is the second largest bank in the ECCU, with assets in excess of $3 billion.” ~ Governor Antoine. 2024-02-01-09-52-44-TImothy-N.-J.-Antoine-RemarksatLaunchofBankofStLuciaMutualFund

Prime Minister Pierre, at the launch of BOSL’s Global Investment Fund, said:

“This is a true milestone that highlights the bank’s commitment to financial innovation and demonstrates BOSL’s responsiveness to the urgent need for diversified and profitable investment options for our citizenry.

“Over the last three years, Saint Lucia’s economy according to data from the World Bank and other independent sources, experienced double-digit growth rates over the last two years. For 2023, it is expected that growth will be between 3-5 percent.

“Our fiscal situation continues to improve last year 2022 we moved from persistent deficits to a primary surplus which demonstrates the robustness of our economy. Our debt-to-GDP ratio increased due to the COVID-19 pandemic but with prudent borrowing, we have halted the rapid plunge that would have led us to unsurmountable or unsustainable debt levels. Our financial paper continues to do well on the Regional Securities Market albeit at competitive rates. Revenue collection is performing steadily. The Health & Security Levy implemented fully in October 2023 has raised approximately $10.5 million at Customs & Excise and the Inland Revenue Department.”

The government of Saint Lucia continues to “create the enabling environment for a financial sector that is globally competitive, well-regulated, diversified, market-driven, and responsive to our local realities,” Prime Minister Pierre advised.

The ECCB, ECCU and external prospects bring into line Prime Minister Pierre’s ‘encouraging economic developments’ to spur innovation and provide increased investment options for a diversified, market-driven economy.

The full Communique of the 107th Meeting of the ECCB Monetary Council is available here.

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