ECCB 2020-2021 Annual Report and Statement of Accounts

MONETARY STABILITY

Maintain Sufficient Foreign Reserves to Support the EC Dollar During the year under review, the ECCB recorded an expansion in its foreign reserve portfolio to approximately EC$4.6 billion. That was primarily due to an increase in the market value of fixed income securities. Reserve levels were about 5.0 per cent above its 12-month average, with valuation changes responsible for most of the adjustments. Response to COVID-19 Pandemic The ECCB’s policy response to the COVID-19 pandemic included the following; ƒ Temporary reduction of the short term policy lending rate (discount rate) for Governments and licensed financial institutions under the Banking Act from 6.5 per cent to 2.0 per cent; ƒ Temporary reduction of the long term policy lending rate (discount rate) from 6.5 to 3.5 percent; ƒ Increase in the credit envelope allocated to Governments from 65.0 per cent to 75.0 per cent of the amount available to Governments and Licensed Financial Institutions; ƒ Production of revised forecasts for Gross Domestic Product (GDP); and ƒ Design of the Programme of Action for Recovery, Resilience and Transformation.

Chart 1 - ECCB Total Foreign Exchange Reserves (in ECS billions)

Chart 2 - Import Cover Ratio (Goods and Services: December 2015 - December 2020)

EASTERN CARIBBEAN CENTRAL BANK ANNUAL REPORT 2020/2021 2