ECCB 2022-2023 Annual Report and Financial Statements

Eastern Caribbean Central Bank Notes to the Financial Statements For the year ended 31 March 2023 (Expressed in Eastern Caribbean dollars)

3. Financial risk management (continued)

e) Fair value (continued)

Fair value hierarchy (continued)

The following table presents the Bank’s financial assets and liabilities that are measured at fair value at 31 March 2022:

Level 1

Level 2

Level 3

$

$

$

Financial assets Commercial paper Certificate of deposits

237,093,094 112,812,679

- - -

-

19,434,681

Derivative financial instruments Foreign investment securities Domestic investment securities

18,793

41,680

2,889,223,706 1,401,058,876

78,205 624,186

-

-

3,126,335,593 1,533,347,916

702,391

Level 1

Level 2

Level 3

$

$

$

Financial liabilities

Derivative financial instruments

-

1,595,349

-

There has been no transfer in/out from level 3.

f) Capital risk management

The Bank’s objectives when ma naging capital are:  Safeguard the Bank’s ability to continue as a going concern ;

 Manage and safeguard the value of the Eastern Caribbean currency; and  Maintain a strong capital base to support its developmental activities.

The Bank manages capital through the maintenance of a general reserve according to prescribed guidelines as mandated in the ECCB Agreement Act 1983.

General reserve

For the year ended 31 March 2023, an amount of $54,520,799 was allocated from the General Reserve to cover the net loss position of the Bank. In 2022, an amount of $49,099,014 was transferred from General Reserve. As of 31 March 2023, the general reserve ratio stood at 2.34% (2022: 3.42%), which was 2.66% (2022: 1.58%) below the 5% target. As at 31 March 2023, the general reserve was $134,889,895 (2022: $190,598,694).

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