Published On: Wed, Mar 28th, 2018

CBCS raises pledging rate

Central Bank_frontWILLEMSTAD/PHILIPSBURG - The United States (US) Federal Reserve raised the federal funds rate to 1.50-1.75 percent on March 21. This is the sixth increase since the historically low level of 0.00-0.25 percent from December 16, 2008, to December 16, 2015.

Because the Antillean guilder is pegged to the US dollar, interest rates in the international money market impact those of the Curaçao/St. Maarten monetary union. For example, the interest rates offered by the Central Bank of Curaçao and St. Maarten (CBCS) on the bi-weekly auctions of certificates of deposit (CDs) for the local banks are based on the international US dollar London Interbank Bid LIBid rate.

CBCS has therefore decided to increase its pledging rate from 1.50 to 2.00 percent effective March 27. This is the (formerly Antillean) Central Bank’s second increase since the historically low level of 1.00 percent applied per December 29, 2008. The previous hike took place on March 20, 2017.

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