07/19/2024 | Press release | Distributed by Public on 07/19/2024 15:44
The One Hundred and Eighth (108th) Meeting of the Monetary Council of the Eastern Caribbean Central Bank (ECCB) was held on 19 July 2024 at the Aurora Anguilla Resort and Golf Club following the Ceremony to Mark the Change in Chairmanship of the Monetary Council.
1.0 Monetary Stability
The Monetary Council received the Governor's Report on Monetary, Credit and Financial Conditions in the Eastern Caribbean Currency Union (ECCU). The Report, titled Pushing Ahead Amidst Increasing Global Turmoil and Uncertainty, provided global and ECCU updates on monetary, credit and financial conditions for the first half of the year and assessed their potential impact in the near to medium term. The Governor's Report indicated that:
d. Here in the ECCU, risks are tilted to the downside (notably, the above-average Atlantic Hurricane Season, volatility in revenues from Citizenship by Investment (CBI) Programmes, inflationary pressures and geopolitical risks).
e. The ECCU's total foreign exchange reserves stand at EC$5.2 billion. The EC currency remains strong, with the backing ratio reaching levels not recorded since 2020 (before the pandemic). The backing ratio is approaching 97.0 per cent (96.64 per cent as at 12 July), up from 95.13 per cent (as at 09 February 2024).
f. Having considered the state of monetary, financial and credit conditions in the ECCU, and on the recommendation of the Governor, the Monetary Council agreed to:
The Minimum Savings Rate (MSR) is the lowest rate that commercial banks can offer on savings deposits. The Central Bank's Discount Rate is the rate at which the ECCB lends to governments and commercial banks.
2.0 Financial Stability
The Monetary Council was advised of the following developments in the financial sector:
In support of financial stability, the Monetary Council approved the following:
3.0 Fiscal and Debt Sustainability
Fiscal performance has improved in tandem with economic recovery. The Debt to GDP ratio has declined to 75.7 per cent (end of 2023) from its peak of 88 per cent at the end of 2020 (first year of the pandemic).
The Monetary Council stands in full solidarity with the Governments and people of Grenada and Saint Vincent and the Grenadines in the wake of Hurricane Beryl. Council ratified the round robin approval of 08 July to grant funding of EC$1.0m each to the Governments of Grenada and Saint Vincent and the Grenadines from Fiscal Reserve Tranche II, to support their relief efforts.
4.0 Growth and Competitiveness
Regional economic growth is forecast to expand by 5.2 per cent in 2024 compared with the provisional 4.5 per cent recorded in 2023.
Source: ECCU Central Statistics Offices and Eastern Caribbean Central BankGrowth in the ECCU is being propelled by tourism and construction. The latter activity is bolstered by relatively low interest rates within the ECCU, supporting borrowing especially for residential mortgages.
Almost all of the ECCU countries recorded double-digit increases in tourist arrivals for the first quarter of this year (data up to March 2024). The ongoing increase in regional airlift is expected to further boost arrivals intra-regionally.
Source: ECCU Central Statistics Offices and Eastern Caribbean Central Bank5.0 Reports received on BAICO, CLICO, ECAMC and ECPCGC
The Monetary Council received Report No 02 of 2024 from the Core Committee on Insurance in respect of efforts to bring resolution for ECCU policyholders of the failed insurance companies - British American Insurance Company Ltd. and CLICO Life Insurance Ltd. Council agreed to continue its efforts to resolve the outstanding matters and facilitate an additional payout to eligible policyholders.
The Monetary Council noted the Report from the Eastern Caribbean Partial Credit Guarantee Corporation (ECPCGC), including ECPCGC's Financial Report as of 31 May 2024. The ECPCGC aims to support small businesses in the ECCU.
Council also approved the Report on the operations of the Eastern Caribbean Asset Management Corporation (ECAMC).
6.0 Date and Venue of the 109th Meeting of the Monetary Council
Council agreed to the convening, virtually, of the 109th Meeting of the Monetary Council on Friday, 18 October 2024 at 9:00 a.m.
7.0 Participation
Council Members attending the meeting were: