2019-2020 Annual Report and Statement of Accounts

MONETARY STABILITY

Advise Monetary Council on Monetary and Credit Conditions Consistent with the ECCB Agreement A key responsibility of the Bank is the production of the Monetary and Credit Conditions Report, which serves to ultimately advise the Monetary Council, and the Board and the Governor of the ECCB on the status of, and developments in, monetary and credit aggregates in the ECCU. The report uses data and information provided by the Statistics Department, and data from international organisations to assess and project money and credit variables. During the year, the Bank’s monetary policy objectives were maintained; the Minimum Savings Deposit Rate of 2.0 per cent and the Discount Rate of 6.5 per cent rate were maintained and the currency peg remained backed by a high level of foreign reserves. Recommendations to the Monetary Council focused on policies for addressing structural bottlenecks in the economy and labour market rigidities; promoting innovation as a central focus in the transformation thrust; building resilience on multiple dimensions to reduce vulnerabilities and safeguard gains; and the need for urgent attention to be directed at addressing threats to financial sector stability. In its continued efforts to ensure that conditions were consistent with the ECCB Agreement, the ECCB also monitored and prepared reports on the banking system and overall ECCU liquidity; maintenance of the required 6.0 per cent reserves; and the status of governments and related accounts. In response to the COVID-19 pandemic, the Bank prepared a comprehensive strategy to support the Currency Union during this period of economic and social distress. The strategy outlined some monetary policy interventions to provide liquidity assistance to Member Governments and banks, while safeguarding the stability of the exchange rate and the financial system. Plan to Maintain a Strong and Stable EC Dollar The External Sector Statistics (ESS) are important indicators utilised in the conduct of monetary policy. The statistics for 2018 were released in December 2019, while the projections for 2019 to 2021 were released at the end of the financial year under review. On the development front, follow-up discussions were held with the External Sector Statistics Adviser at the Caribbean Regional Technical Assistance Centre (CARTAC) regarding back-casting the series so that historical information is available for research and policy purposes. The back-casting exercise became necessary because of the Bank’s transition to the standards prescribed by the Sixth Edition of the Balance of Payments Manual and the International Investment Position Manual from the Fifth Edition. In November 2019, collaboration between the CARTAC and ECCB resulted in the hosting of an external debt statistics workshop for the ECCU member counties. The workshop brought together stakeholders from the national statistics offices, debt management units, ECCB and the CARTAC. The workshop provided information on the methodological framework used to compile external debt statistics while providing a medium to discuss challenges in and solutions to compiling debt data in the ECCU. The linkages between external debt statistics and the Balance of Payments and International Investment Position were also highlighted.

Scenes From External Debt Statistics Workshop - November 2019

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