ECCB 2022-2023 Annual Report and Financial Statements

Eastern Caribbean Central Bank Annual Report 2022 - 2023

reduction of $55.7 million in General Reserve due to the utilisation of the fund to cover the Bank’s net loss for the year ended 31 March 2023 and the transfer of $1.1 million to the Pension Reserve. The fall-off in Total Equity was also attributable to a decrease of $12.3 million in Revaluation Reserve on Foreign Investment Securities due to unrealised valuation losses on these instruments over the year. Additionally, Pension Reserve decreased by $3.2 million due to the recording of actuarial losses on the Bank’s defined benefit pension plan.

Total Liabilities increased by $174.9 million (3.1 per cent) to $5,757.3 million year-over-year, principally due to increases of $108.1 million in Commercial Banks’ Reserve balances and $84.3 million in Currency in Circulation. The aforementioned increases were offset by decreases of $32.8 million in Participating Governments’ Call accounts and $28.6 million in Participating Governments’ Operating accounts.

Total Equity decreased by $71.2 million (28.3 per cent) to $180.2 million. The decline was principally due to a

Statement of Profit or Loss The Bank recorded a net loss of $54.5 million for the year ended 31 March 2023, an increase of $5.4 million compared to a net loss of $49.1 million in the previous financial year. The deteriorated performance was largely driven by significant losses on the sale of foreign investment securities and U.S. Agency Mortgage-Backed Securities, as the Bank repositioned its foreign reserves portfolio, considering interest rates globally rose at high levels over the financial year. These losses were offset by increases in interest income earned on foreign investment securities and money market instruments due to the higher interest rates resulting from the Federal Reserve Bank’s aggressive monetary policy in response to high inflation in the United States of America.

Chart V - Operating Results ($ Millions)

56