Liquidity conditions improved, governments fiscal position strengthened in ECCU

BASSETERRE,ST. KITTS, JULY 2ND 2012 (CUOPM) – Liquidity conditions in the Eastern Caribbean Currency Union (ECCU) continued to improve despite some tightening at some banks.

This is according to the communiqué issued by the Eastern Caribbean Central Bank (ECCB) following Friday’s 73rd Meeting of the monetary Council.

(left to right) – Honourable Roosevelt Skerrit, Prime Minister and Minister for Finance, Commonwealth of Dominica; Dr. the Right Hon. Kenny Anthony, Prime Minister and Minister of Finance of St. Lucia; Honourable Hubert Hughes, Chief Minister and Minister for Finance, Anguilla; Dr. the Honourable Ralph Gonsalves, Prime Minister and Minister for Finance, St. Vincent and the Grenadines; The Right Honourable Dr.Denzil L. Douglas, Prime Minister and Minister for Finance, St. Kitts and Nevis; Honourable Nazim Burke, Minister for Finance, Grenada; The Hon. Sir K. Dwight Venner, Governor of the Eastern Caribbean Central Bank (ECCB); Honourable Harold Lovell, Minister for Finance, Antigua and Barbuda and Honourable Reuben T. Meade, Premier and Minister for Finance, Montserrat at the Bank’s Headquarters during the 73rd Meeting of the Monetary Council. (Willets Photo).

The Monetary Council met under the chairmanship of the Right Honourable Dr. Denzil L. Douglas, Minister for Finance, St Kitts and Nevis.

It received the Governor’s Report on Monetary and Credit conditions in the ECCU which assessed these conditions over the quarter ended March 2012 against the backdrop of global economic and financial developments and provided an outlook for the near to medium term.

The Council was apprised that monetary and credit conditions were stable during the first quarter of 2012 and were assessed to have eased relative to the first quarter of 2011.

It said loan growth was depressed and the non-performing loans ratio increased. Interest rates remained relatively stable and credit to the private sector fell compared to the same period of 2011.

“The fiscal position of member governments also strengthened relative to the first quarter of 2011, mainly on account of a narrowing in the overall and primary deficits as adjustments were made to reduce capital expenditures,” the communiqué said.

It said the exchange rate remained stable. “The ECCB’s backing ratio rose to 96.6 percent, well above the 60.0 percent statutory requirement and the real effective exchange rate rose, suggesting a loss of competitiveness for ECCU exports,” it said.

The Monetary Council said it considered the scope for the implementation of monetary policy in the ECCU and agreed that adjustments in the ECCB’s administered rates were not warranted or appropriate at this time. Council therefore agreed to maintain the minimum savings deposit rate at 3.0percent and the Central Bank’s discount rate at 6.5 percent.

Council members attending were the Honourable Reuben T. Meade, Premier and Minister for Finance, Montserrat; Honourable Hubert Hughes, Chief Minister and Minister for Finance, Anguilla; Honourable Harold Lovell, Minister for Finance, Antigua andBarbuda; Honourable Roosevelt Skerrit, Prime Minister and Minister for Finance, Commonwealth of Dominica; Honourable Nazim Burke, Minister for Finance, Grenada;The Right Honourable Dr. Denzil L. Douglas, Prime Minister and Minister for Finance, St. Kitts and Nevis; Dr. the Honourable Ralph Gonsalves, Prime Minister and Minister for Finance, St. Vincent and the Grenadines and Dr. the Right Hon. Kenny Anthony, Prime Minister and Minister of Finance of St. Lucia.