Published On: Fri, Jan 3rd, 2014

Required reserves commercial banks up again

Central BankWILLEMSTAD - The Central Bank of Curaçao and Sint Maarten (CBCS) has concentrated its policies since November of last year on tightening the space on the local money market. The rate of compulsory reserves was increased by 0.25 percentage point to 16.75%. The purpose of this tool is to influence the liquidity of banks and thus growth in lending.

Despite the increase in the percentage, the outstanding amount of required reserves remained the same due to a reduction in the basis on which it is calculated.

The monetary base has increased by 60.9 million guilders in November 2013 due to an increase in the current account balances of the commercial banks to 48.4 million and an increase in the value of banknotes and coins in circulation to 12.5 million guilders.

The increase in the current account balances of the commercial banks was largely due to net sales of foreign exchange to the CBCS and a transfer from the General Pension Fund of Curacao from its account at the CBCS in favor of its account at a commercial bank.

The post ‘Gold’ on the asset side of the balance sheet has decreased by 53.4 million dollars as a result of lower market value on the balance sheet date, compared with the end of October 2013. The decrease in the item ‘Capital and reserves’, on the liabilities side of the balance, was related to the decrease in the market value of gold.

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