Published On: Thu, Jun 26th, 2014

The Central Bank continues to reduce space on the capital market

Central BankWILLEMSTAD – During the month of May 2014, the Central Bank of Curacao and Sint Maarten has directed its policies on the continuation of the reduction of space on the capital market. The percentage of the mandatory reserve, which is the most important instrument, was increased by 0.25 % to 17.75%. This instrument has as its goal to influence the liquidity of the commercial banks and the increase in extending credit. This is according to the Central Bank in a report published this week.

As a consequence of the increase in percentage of the mandatory reserve, the sum of these reserves has increased by 30.4 million guilders. Furthermore, the Central Bank has tried to get rid of the excess liquidity by selling a large sum of the Certificates of Deposit. But the registration for this bidding did not amount to much and consequently the pending sum of the Certificates of Deposit has decreased by 11.0 million guilders.

The basic quantity of money has increased by 20.5 million guilders in May 2014. Reason for this was the increase of funds on the current accounts of commercial banks (24.2 million guilders). This increase was caused by the purchase of foreign exchange currency at the Central Bank.

The post Debenture to non residents has increased by 274.9 million guilders. This is, in part, because of the money transfer from an account of the Dutch Ministry of Internal Affairs and Kingdom Relations to the Central Bank. This transfer was destined for the purchase of bonds emitted by Curacao and Sint Maarten at the beginning of June 2014. The Dutch State has registered automatically for the purchase of these bonds. This transaction explains the increase of 281.5 million guilders on the post Foreign Exchange Currency on the balance.

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