Published On: Mon, Jan 14th, 2013

Interest CBCS in 2013 also 3 percent

WILLEMSTAD – In 2013, the Central Bank of Curaçao and Sint Maarten (CBCS) will maintain the official or legal interest at 3 percent. This is for the fourth consecutive year.

Twice a year, the Central Bank publishes the official rate. Since July 1, 2009 this was set at 3 percent. Six months earlier, on January 1, 2009, this statutory interest amounted to 3.75 percent. The official interest on Curacao has certainly not always been relatively low. Especially from 2002, there were significant declines visible, as deduced from a statement. This was the beginning of September 2002, 9 percent (three times as much as is currently the case), from mid-2002 the statutory interest decreased to 7.75 percent. After that it quickly went down further. Up to 5.5 percent in January 2003 and 4.5 percent in July that year. Followed by 4.25 percent beginning 2004.

Yet there was a short period of rising official interest. In 2005 this increased to 4.75 percent and to 5.25 percent in the second half of that year. The year 2006 again saw an increase twice, namely to 6.25 and 7.25 percent. And in 2007 was the level of 7.5 percent achieved. The year 2008 saw a sharp decline to even 4.5 percent. The legal interest before 2002 has been 9 percent for a very long time, namely since 1988, yielded a constant 9 percent.

Yet that is not the highest level. From January to June 1987 was the official interest not less than 11 percent. This is according to a summary of the Central Bank dating back to 1987. The statutory interest is calculated based on the so-called 'pledging rate (lending rate). The lending rate is the rate which commercial banks may get loans from the Central Bank against collateral. Because banks do this with a collateral they call it a pledging; borrowing with collateral (government bonds, deposits with the Central Bank, etc.).

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