ECCB 2020-2021 Annual Report and Statement of Accounts

FISCAL AND DEBT SUSTAINABILITY

be necessary, which were not possible given the tight fiscal space of these countries and the healthcare and other expenditure warranted by the pandemic. Emanating from these findings, a number of policy recommendations were proposed to the member governments. The Monetary Council approved the option to maintain the current fiscal target of 60.0 per cent Debt to GDP Ratio and to extend the date of achievement to 2035, to lessen the fiscal effort required by member governments post the COVID-19 pandemic. Notwithstanding, the Monetary Council agreed to encourage the governments of countries which are on the trajectory to achievement by 2030, to be persistent and do so. Track Member Countries Performance Related To Fiscal And Debt Sustainability And Share Information With Member Countries And Other Stakeholders Through its continuous country surveillance activities, the Bank keeps track of themain fiscal indicators of the countries, updatesmacroeconomic frameworks and prepares fiscal projections both for policy considerations and for integration into the Debt Sustainability Analysis (DSA) frameworks. The DSA frameworks for the eight member countries benefitted from the 20-year projections and the report on the main findings, including the primary surpluses needed to achieve the 60.0 per cent debt to GDP target. These findings also contributed to the comprehensive analysis of the fiscal anchor undertaken by the ECCB during the course of the year. Improve The Functioning Of The Market For Government Securities During the financial year, the Bank continued to provide oversight, technical and advisory support to participating member governments to ensure stability and the proper functioning of the Regional Government Securities Market (RGSM). The Bank engaged in enhanced market oversight, surveillance and intelligence gathering activities noting the rising importance of the RGSM during the pandemic and underscored the need for preserving and maintaining market access for issuers and investors. The ECCB also provided assistance through the review of prospectuses, administration of the auctions and facilitating investor payments to support the issuance of government securities on the RGSM. Performance of th e RGSM The performance of the RGSM remained relatively stable as annual fund raising managed to exceed EC$1.0b for another year, resulting in a 7.8 per cent increase in the cumulative value of total funds raised on the RGSM from inception to date. The five participating governments navigated the uncertainties of the pandemic by deploying responsive investor relations strategies and continuing to satisfy debt service obligations, while actively accessing the market to fulfill short-term financing needs at competitively low rates, ranging from 1.5 to 4.3 per cent. At the 43 rd Meeting of the Regional Debt Coordinating Committee (RDCC) held on 29 October 2020, the Bank discussed strategies for developing a vibrant local currency bond market in the ECCU, underpinned by recommendations from the recent conclusion of a technical assistance initiative conducted by the International Monetary Fund in August 2020. Key areas for developmental reform include the primary market, investor base, secondary market, financial market infrastructure and the legal and regulatory framework. The RDCC approved the Bank’s

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” The Bank engaged in enhanced market oversight, surveillance and intelligence gathering activities noting the rising importance of the RGSM during the pandemic and underscored the need for preserving and maintaining market access for issuers and investors.

EASTERN CARIBBEAN CENTRAL BANK ANNUAL REPORT 2020/2021 15