Published On: Mon, Feb 4th, 2013

The “gold” post at the Central Bank has decreased with 46.7 million

WILLEMSTAD – During the month of December the Central Bank directed its monetary policy on the continuation of the limitations on the capital market. This is according to the Central Bank’s report this week. In the report the Bank states that the percentage of the mandatory reserve has been increased with 0.50% to 14.25%.

This instrument is directed and destined to influence liquidity of the commercial banks and with that the increase of the credit loans. As a consequence of the percentage increase, the sum of the mandatory reserves has increased with 27.5 million guilders.

The Central Bank has also concentrated solely on the Certificates of Deposit (CD) which are expired and which keeps the open amount equal. The quantity of basic money has increased with 27.4 million guilders, as a consequence of the increase on money in circulation (31.8 million), but was neutralized by the decrease in amounts on current accounts at commercial banks (4.4 million). These bank notes and coins in circulation have increased because of a bigger demand by the public because of the festivities.

The decrease in the amounts un current accounts at commercial banks was because of an increase in mandatory reserves. Furthermore, temporal credits which are given by the Central Bank were completely liquidated. This appears on the post “Collections of banks” (52.4 million).

To finance a net collection of bank notes and coins, the mandatory reserve and the payment of the temporal credit, banks have sold foreign exchange to the Central Bank. This clears why the increase of 117.8 million on the post “Foreign Exchange” at the Central Bank.

Finally, the post “Gold” has decreased with 46.7 million because the gold has lost value on the market at the time of the calculation. These calculations are compared with the month of November 2012.

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