ECCB 2017-2018 Annual Report and Statement of Accounts

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ECCB ANNUAL REPORT 2017/2018

G lobal economic activity strengthened in 2017 and provided the impetus for improvement in economic conditions of the member countries of the Eastern Caribbean Central Bank (ECCB). The buoyancy in economic activity, both internationally and regionally, contributed significantly to growth in foreign reserves and an overall improvement in the balance sheet of the Central Bank. Notwithstanding those favourable developments, the impact of significant natural disasters on some member states continues to highlight the vulnerability of the region to these natural events and the challenges policy makers face in sustaining an upward growth path. This report provides a detailed account of the Bank’s performance for the financial year ended 31 March 2018, in pursuit of fulfilling the statutory mandates and strategic goals as approved by the Board of Directors and Monetary Council. The Board of Directors and Monetary Council’s approval of the Strategic Plan for 2017-2021 in February 2017, laid the foundation for the work programme of the Bank over the financial year. The Strategic Plan built on work the Bank had been pursuing in previous years and incorporated a number of new initiatives aimed at ensuring the effective execution of the Bank’s mandates, given the dynamic economic and financial environment in which it operates. The development and execution of work programmes were based on the following key strategic priorities: Enhancing the robustness and effectiveness of the policy making framework with a view to maintaining monetary and exchange rate stability - One of the major successes of the Bank has been its ability to preserve and maintain the credibility of its strong EC dollar monetary policy. The stability of the EC dollar

has served as an anchor for domestic prices and a stable macroeconomic environment. This has been manifested in historically relatively low inflation rates which track that of the anchor country, the United States of America and a stable macroeconomic environment that has been conducive to broad- based sustainable growth. It is critical that the Bank continue to maintain and sustain its strong EC dollar policy into the foreseeable future. Some of the significant objectives targeted and implemented to fulfil this mandate during the year included: •  • Improving its surveillance mandate through close monitoring of macro-economic, financial and socio-political developments; •  • Targeted research activities aimed at better understanding issues related to credit and economic growth, sustainable output growth, structural reforms in the ECCU, mergers in the financial sector and financial cycles; •  • Developing an Investment Policy for the management of the Bank’s foreign reserves which includes its risk tolerance; and •  • Improving the measurement of economic growth in the currency union and widening the scope in the collection of economic and qualitative data to better monitor the economic performance of member states and improve monetary policy decision making framework. The buoyancy in economic activity, both internationally and regionally, contributed significantly to growth in foreign reserves and an overall improvement in the balance sheet of the Central Bank