ECCB Communications Workshop for ECCU Media Practitioners

FOR ECCU MEDIA PRACTITIONERS COMMUNICATIONS WORKSHOP ECCB

“Connect, Engage, Align: Optimising Central Banking Communication and Strengthening Partnerships”

26-27 March 2026 ECCB Headquarters Bird Rock, St Kitts

Welcome to World of ECCB

Brief History

A Trip Down Memory Lane

Eastern Caribbean Central Bank

The Eastern Caribbean Central Bank was established on 1 October 1983 as part of the Treaty of Basseterre.

2

Brief History

A Trip Down Memory Lane

Member Countries

Eight countries make up the Eastern Caribbean Currency Union (ECCU) 1. Rainbow City - Tranquility Wrapped In Blue

2. The Hidden Gem of the Caribbean 3. Nature Island of the Caribbean

4. Isle of Spice 5. Emerald Isle

6. Sugar City and Queen City 7. Helen of the West Indies 8. Hairouna – Land of the Blessed

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Brief History

A Trip Down Memory Lane

Member Countries

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Mission and Vision

Mission

Advancing the good of the people of the currency union by maintaining monetary and financial stability and promoting growth and development . Vision To be a model institution delivering exceptional service and influential policy advice to support the development of a thriving currency union.

5

Governance

Monetary Council

• The highest decision making authority of theECCB • Comprises Ministers for Finance of eight member countries • The function of the Council is to provide directives and guidelines on matters of monetary and credit policy to the Bank

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Governance

Monetary Council

Dr The Hon Godwin Friday Saint Vincent and the Grenadines

Hon Dr Irving McIntyre Commonwealth of Dominica

The Hon Cora Richardson-Hodge Anguilla

Hon Philip J Pierre Saint Lucia

Hon Dennis Cornwall Grenada

Hon Gaston Browne Antigua and Barbuda (Chairman)

The Hon Dr Terrance Michael Drew Saint Christopher (St Kitts) and Nevis

Hon Reuben T Meade Montserrat

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Governance

Board of Directors

• Comprises ten Directors - the Governor and Deputy Governor, and one Director appointed by each Government of the eight ECCB member countries. • Responsible for policy and general administration of the Bank, while the Governor, the Chief Executive, is responsible for the day-to-day management and operations.

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Governance

Board of Directors

Kathleen Rogers Anguilla

Edmond Jackson Saint Vincent and the Grenadines

Dr Valda F Henry Deputy Governor

Rasona Davis-Crump Antigua and Barbuda

Francis Fontenelle Saint Lucia

Timothy N. J. Antoine Governor (Chairman)

Denise Edwards Commonwealth of Dominica

Hilary Hazel Saint Christopher (St Kitts) and Nevis

Kenya Lee Montserrat

Mike Sylvester Grenada

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Role and Function

The Monetary Arrangement

• The issuance of a single common currency, the flow of which is unrestricted among its members. • A common pool of foreign exchange reserves; and • The existence of a Central Monetary Authority which decides on the Union's monetary policy.

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Role and Function

The Bank’s Purpose…

• To actively promote through means consistent with its other objectives, the economic development of the member countries.

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Role and Function

Currency Management

• The ECCB manages the issuance and circulation of the EC Currency within the ECCU. • Responsible for printing notes and minting coins through suppliers/producers.

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Role and Function

Supervision

• The ECCB regulates all banks and other financial institutions licensed under the Banking Act that carry on banking business in the Eastern Caribbean Currency Union (ECCU).

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Role and Function

Payment System

• The ECCB provides payment system oversight and regulations in order to develop effective, efficient, reliable, accessible and secure payment systems that serve the needs of the ECCU and support a competitive private sector environment.

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Public Education

Public Educations Programmes

• Financial Information Month Festival • ECCB Connects Weekly Release • Social Media ( ECCB Connects - YouTube, Tik Tok, Instagram, Facebook, LinkedIn, X, WhatsApp) • Savings and Investment Course • Small Business Workshops • Media and Communications Workshops

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Community Outreach

Community Outreach Programmes Corporate Social Responsibility

• ECCB Primary School Mentorship Programme • ECCB Children’s Connection Radio Programme • ECCB Creative Youth Competition • Sir Arthur Lewis Memorial Lecture • ECCB/Alison Phills Book Award • ECCU Bank of the Year Awards • ECCB International Netball Series • Student Programme for Innovation in Science and Engineering (SPISE)

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Thank You!

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Eastern Caribbean Central Bank

Monetary Policy Unpacked

Prepared for ECCU Media Practitioners Workshop 25 to 26 March 2026

Transforming The ECCU Together

3/30/2026

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Eastern Caribbean Central Bank

Monetary Policy in the Context of the ECCB

• Monetary Policy by Definition & Practice • Eastern Caribbean Central Bank and its Major Functions • Monetary Policy in the Context of the ECCB • Limitations of conducting Monetary Policy in the ECCU • Conclusion

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Eastern Caribbean Central Bank

Monetary Policy by Definition & Practice

• Definition(s): Bank of England – “Monetary policy is action that a country's central bank or government can take to influence how much money is in the economy and how much it costs to borrow .” Federal Reserve (FOMC) – “Monetary Policy refers to the actions undertaken by a central bank, such as the Federal Reserve, to influence the availability and cost of money and credit to help promote national economic goals. It is the combination of strategy and actions that the Federal Reserve employs to achieve the economic goals set for it by Congress .”

Central Bank of Trinidad and Tobago – “Monetary Policy refers to actions and decisions undertaken by the Bank to create appropriate conditions that are in line with the country’s economic objectives.”

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Eastern Caribbean Central Bank

Monetary Policy by Definition & Practice cont’d • Traditional Monetary Policy Tools(s) used by central banks: I. Open Market Operations (OMO) – Purchase/Sale of Government Bonds/Treasury Bills I. Quantitative Easing II. Repos and Reverse Repos III. Term Deposit Facility IV. Securities Lending Programme II. Discount Window Lending/Discount Rate – The rate the Central Bank charges for overnight borrowing for liquidity needs by commercial banks III. Reserve Requirement – The minimum percentage of customer deposits that banks must hold in reserve rather than lend out.

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Eastern Caribbean Central Bank

Eastern Caribbean Central Bank and its Major Functions • The Eastern Caribbean Central Bank (ECCB) officially came into being on 1 October 1983, part of the Treaty of Basseterre establishing the Organisation of Eastern Caribbean States (OECS); Successor to: i. West Indian Currency Committee: < 1950 ii. British Caribbean Currency Board; established in 1950 iii. Caribbean Currency Authority; established in 1965 • The Fixed Exchange Rate Peg which underpins the Currency Arrangements of the ECCB Preceded by: i. British Caribbean Currency Board; exchange rate parity of EC$4.80 to £1. ii. The Pound Sterling begins to Float – 23 June 1972 iii. End of Sterling Guarantee Agreement – 31 December 1974 iv. Re-peg to USD: ECCU took the decision to change the intervention currency from the pound sterling to the US dollar – 1976; EC$2.70 = US$1.00 (50 years) 3/30/2026 Transforming The ECCU Together 5

Eastern Caribbean Central Bank

Eastern Caribbean Central Bank and its Major Functions cont’d

The Eastern Caribbean Central Bank Agreement, 1983 is a treaty among the Participating Governments of the Eastern Caribbean Currency Union (ECCU) committed to collaboration in the area of central banking. The Participating Governments are Anguilla, Antigua and Barbuda, Commonwealth of Dominica, Grenada, Montserrat, Saint Christopher (St Kitts) and Nevis, Saint Lucia and Saint Vincent and the Grenadines.

Article 4 clearly enunciates the purposes of the Bank which are:

1. to regulate the availability of money and credit;

2. to promote and maintain monetary stability;

3. to promote credit and exchange conditions and a sound financial structure conducive to the balanced growth and development of the economies of the territories of the Participating Governments; 4. to actively promote through means consistent with its other objectives the economic development of the territories of the Participating Governments.

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Eastern Caribbean Central Bank

Eastern Caribbean Central Bank and its Major Functions cont’d

• Functions of the ECCB

i. Currency Issue and Management of Foreign Reserves ii. Banker to Governments iii.Banker to Commercial Banks iv.Bank Supervision v. Conduct of Monetary Policy..

..by the ECCB, in the context of a Fixed Exchange Rate Currency

Peg

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Eastern Caribbean Central Bank

Eastern Caribbean Central Bank and its Major Functions cont’d

Functions of the ECCB

• Currency Issue and Management of Foreign Reserves – Responsibility for the production and distribution of notes and coins in keeping with the demands of the economy. As circumscribed by the ECCB Agreement 1983 “Subject to paragraph (3) of this article the Bank shall at all times maintain the External Reserves in an amount not less than sixty per cent of the value of the currency issued or deemed by the Bank to have been issued by it and in circulation and other demand liabilities but excluding coin issued for commemorative purposes.” • Banker to Governments – The Central Bank may provide deposit and borrowing facilities to governments, administer the public debt, act as fiscal agent and render technical advice on matters of monetary and financial policy. • Banker to Commercial Banks – Embraces; (i) Commercial banks’ holding of minimum cash balances with the Central Bank as statutory reserves; (ii) Provision by the Central Bank of a Clearing House Facility where commercial banks meet daily fro presentation of cheques and for settlement of balances as a result of the mutual claims and debts of each bank. • Bank Supervision – The Primary objective of bank supervision is to foster and maintain sound banking conditions so as to ensure continuation of essential banking services

• Conduct of Monetary Policy

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Eastern Caribbean Central Bank

Monetary Policy in the Context of the ECCB

What is a Fixed Exchange Rate Regime/Currency Peg? • A fixed exchange rate regime is a monetary policy where a country’s central bank pegs its currency value to another major currency (e.g., USD, EUR) or a basket of currencies to ensure stability. • In the case of the ECCU since 1976 the Monetary anchor has been an arrangement which maintains a currency peg of EC$2.70 = US$1.00. In other words, a minimum of sixty (60) per cent of total demand liabilities (issued in domestic currency) must to be backed by an equivalent amount in foreign currency to support at least three months of the total imports of the Eastern Caribbean Currency Area.

• The ECCB manages a foreign exchange pool in which all the countries place their reserves into a common fund on which they can draw, only by presenting local currency in exchange for the foreign currency held in the pool. 3/30/2026 Transforming The ECCU Together 9

Eastern Caribbean Central Bank Monetary Policy in the Context of the ECCB cont’d • The principle here is that with a number of countries putting in and taking out foreign currency at different times there is a backing factor.

• The justification for entering into such an arrangement is that given the structure of the ECCU economies, small open economies (physical size, economy, population) with narrow resource bases (few productive sectors), it is beneficial for the region to peg to its major trading partner. Why?

• Since the level/strength of a country’s currency (domestic/local) is largely dependent on the demand for that currency it would be difficult for ECCU countries to maintain stable currencies given the very limited range of products that the region makes to sell to the rest of the world. So the demand simply would not be there for the domestic currency of the countries of the ECCU in the absence of the peg as countries purchase goods and services from countries in their domestic currency.

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Eastern Caribbean Central Bank

Monetary Policy in the Context of the ECCB cont’d • Monetary Policy Tools Discount Policy /Rate – This refers to the power of the Central Bank to change interest rates. A central bank may therefore exercise close control over domestic credit or interest rates through manipulation of the discount rate as was done in May 1993 and August 2023.

Open Market Policy (Open Market Operations) – The purchase or sale by the Central Bank of governments’ securities in order to influence the money supply

Reserve Requirements – the Central Bank is authorised to prescribe minimum reserve requirements for banks and other financial institutions

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Eastern Caribbean Central Bank

Monetary Policy in the Context of the ECCB cont’d • Monetary Policy Tools cont’d

Selective Credit Controls – The Central Bank has the authority to determine the permissible purpose, aggregate ceilings and maximum interest chargeable in respect of loans and overdrafts. The Bank may in consultation with the respective Governments determine priority areas for credit distribution and direct lending to those sectors.

Minimum Savings Rate (MSR) – The MSR was also envisaged as an explicit tool of monetary policy, as set out in Article 34(1) of The Central Bank Agreement Act. In the ECCU, institutional factors such as the lack of financial depth and liquidity of money markets limited the use of market-based instruments to conduct monetary policy. The MSR was introduced to initiate the transmission mechanism between the central bank policy rate and market interest rates, and the ultimate policy goals of employment, output and prices. Another function of the MSR was to serve as a benchmark interest rate, by which market participants can be guided when considering savings, investment and consumption decisions. ‘A CRITICAL REVIEW OF THE MINIMUM SAVINGS RATE AS A MONETARY POLICY TOOL’ ECCB

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Eastern Caribbean Central Bank

Limitations of Monetary Policy in the ECCU • Entering into the peg has allowed the region to maintain a stable and predictable currency, which minimises the uncertainty associated with rapidly fluctuating exchange rates. Additionally, being pegged to the US dollar also serves to keep inflation rates predictable, as they move broadly with US inflation. Predictable inflation rates strengthens business confidence and facilitates economic growth. • By virtue of the monetary anchor to the US dollar, which is influenced by US monetary policy as well as other external factors including the demand for the currency of the US, the region’s monetary policy is greatly influenced by developments in US monetary policy as transmitted through fluctuations in the US dollar exchange rate (currency competitiveness) and interest rates (cost of capital).

• The inability to simultaneously opt for an open capital account, a fixed exchange rate regime, and monetary autonomy is a central postulate in international macroeconomics known as the “impossible trinity ”. ( IMF Working Paper ‘Monetary Policy Transmission in the Eastern Caribbean Currency Union) 3/30/2026 Transforming The ECCU Together 13

Eastern Caribbean Central Bank

Limitations of Monetary Policy in the ECCU cont’d • Therefore, under a fixed exchange rate regime with open capital markets and under developed financial markets the scope to conduct independent monetary policy is marginal. The ECCB has sought to operate within these limitations by holding reserves in excess of the Statutory Limit (60 per cent) and the Operational Limit (80 per cent) as a cautionary measure.

• In fact as at the end of February 2026 the Backing Ratio was 99.3 per cent, significantly above both the legal/statutory and operational limits. The backing ratio as at the end of February 2026 reflected the Bank’s holdings of foreign reserves equivalent to cover 6.2 months of imports, more than twice the recommended ratio of 3.0 months.

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Eastern Caribbean Central Bank

Conclusions • The nature of the arrangement in the ECCU, the establishment of a fixed exchange rate regime, limits the ECCB in the policy tool options for conducting monetary policy as traditional objectives of Central Banks (i.e. low inflation) become secondary to the maintenance of the peg. • The fixed exchange rate peg/Quasi – Currency Board, as exists in the ECCU implies an adoption of the monetary policy of the economy to which the currency is pegged. In the case of the ECCU the pegging of the EC dollar to the US dollar implies adherence to the monetary policy of the Federal Reserve Bank of the United States.

• The arrangement with US monetary policy makers by way of the peg blunts the effectiveness of traditional monetary policy instruments utilised by the ECCB, as initiatives made by the ECCB that are inconsistent with US monetary policy will be ineffective in the long-run.

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Eastern Caribbean Central Bank

Conclusions

THANKS FOR YOUR ATTENTION !

QUESTIONS?

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FROM VAULT

Currency

Management

Department

TO WALLET

ISSUING AND MANAGING THE EC CURRENCY

Rosbert Humphrey Director, CMD

Bank Notes

Where are the banknotes made?

Where are the coins made?

HOW ARE STOCK AND ORDER QUANTITIES DETERMINED?

Stock

Forecast

• To determine order quantities • Based on vault’s holding capacity

Forecasting allows us to determinie how much currency, and what denomination a country needs.

Stock HOW ARE STOCK AND ORDER QUANTITIES DETERMINED?

The Process

• Order confirmation • Contract • Artwork and samples for approval • Production

• Shipment to ECCB • Receipt and Storage

VAULTS IN THE COUNTRIES

Commercial banks in the Eastern Caribbean Currency Union request currency from the ECCB weekly.

• -Commercial banks issue currency to the public • -Public spends currency at businesses • -Businesses deposit to the commercial banks

• -Commercial banks receive currency in deposits from the public • -Commercial banks separates currency based on their condition

• -Commercial banks reissue currency to the pubic • -Commercial banks redeem currency to the ECCB

Stock BANKNOTES ARE CLASSIFIED AS FOLLOWS

• New Notes • Fit Notes • Unfit Notes • Mutilated Notes

• Fit and New notes are issues to the public

• Excess Fit Notes are redeemed at the ECCB

• Unfit and Mutilated Banknotes are redeemed at the ECCB

THE MONEY CIRCLE The Process

Performance

Analysis Strategy

Central Bank

Commercial Bank

Commercial Bank

MONEY CIRCLE

Public

Spending

DESTRUCTION

Stock

• Destruction of unfit banknotes (online) • Destruction of rejected banknotes • Destruction of mutilated banknotes

BASIC FEATURES OF THE ECCB BANKNOTES

BASIC FEATURES OF THE ECCB BANKNOTES

BASIC FEATURES OF THE ECCB BANKNOTES

Stock

Stock

THANK YOU

QUESTIONS & ANSWERS SEGMENT

rosbert.humphrey@eccb-centralbank.org

869 465 2537

Bird Rock, Basseterre

www.eccb-centralbank.org

THE FUTURE OF PAYMENTS IN THE ECCU ECCB COMMUNICATION WORKSHOP FOR MEDIA PRACTITIONERS 26 March 2026 Sharmyn Powell, Director Payments Modernization and Financial Inclusion Unit Eastern Caribbean Central Bank

Relentless Focus... Amplified Impact!

Roadmap

01

Overview

Evolution of Payments in the ECCU

02

Summary of Achievements 03

Remaining Gaps in the ECCU payments landscape 04

What‘s Next for Payments

in the ECCU? 05

Closing Thoughts 06

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Overview

The ECCU payment ecosystem has gone through various transitions and reflects a deliberate shift from manual to digital operations. The modernisation efforts have been driven by the ECCB in collaboration with regional stakeholders. Each milestone along the way builds on the previous enhancements and all are part of the overall objective to create a stronger, faster and more inclusive payment ecosystem. 3 Relentless Focus... Amplified Impact!

Evolution of Payments in the ECCU

Pre-2010 Manual, paper based processes

2011 ECACHSI established

2014 ECACH launched

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Relentless Focus... Amplified Impact!

Evolution of Payments in the ECCU

2015

2017

2019 - 2024

Cheque imaging introduced

EFT/ACH rollout

DCash Pilot Project development and rollout

Legislative enhancements and modernisation

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Relentless Focus... Amplified Impact!

Performance Statistics Transaction volumes processed through ECACH increased from approximately 5 million in 2016 to nearly 7 million in 2025. In 2025, the total value of transactions processed through ECACH exceeded XCD 32 billion. Importantly, in 2025, the volume of EFT transactions surpassed cheque volumes in the ECCU.

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Relentless Focus... Amplified Impact!

Summary of Achievements Modern Automated Clearing House (ACH) infrastructure Electronic Funds Transfer (EFT) functionality Central Bank Digital Currency (CBDC) pilot project implemented in all ECCU countries Harmonised legislation Progress towards a Fintech-ready ecosystem Greater financial inclusion

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Relentless Focus... Amplified Impact!

Remaining Gaps in ECCU Payments Landcape

Limited interoperability

Varying levels of digital adoption

Cross-border payment ‘pain points’

Resilience and redundancy challenges

Fintech integration

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Regulatory implementation still in progress

What’s Next for Payments in the ECCU?

The development and implementation of an ECCU Fast Payment System (FPS)

Full harmonisation of payment legislation across the ECCU

Participation in CARICOM Payment System and Settlement (CAPSS) pilot project.

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Relentless Focus... Amplified Impact!

ECCU Fast Payments System (FPS) Features: Real time payment across the ECCU 24/7 availability Interoperability Reduced cost Expanded coverage to include digital wallets and mobile payments

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Relentless Focus... Amplified Impact!

ECCU Fast Payments System (FPS)

Benefits: Reduced instances of liquidity challenges Lower transaction costs Reduction in the use of and reliance on cash and cheques Strengthened integration across the region

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Relentless Focus... Amplified Impact!

CARICOM Payments and Settlement System (CAPSS) Pilot

Objectives: Enable faster and more affordable cross border payments within CARICOM Improve settlement efficiency Strengthen regional financial integration Precursor to a regional Real-time Gross Settlement (RTGS) system

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Relentless Focus... Amplified Impact!

CARICOM Payments and Settlement System (CAPSS) Pilot

Benefits: Addresses the existing gaps in cross-border payments and interoperability Supports trade, remittances and economic mobility across CARICOM The ECCU is better able to participate in future enhancements in the payments space across CARICOM

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Relentless Focus... Amplified Impact!

GAPS

Interoperability Transfer delays Resilience Limited digital usage

Payments Modernisation in Action

FPS

CAPSS

Improve CARICOM cross border transfers Reduced transfer costs Regional settlement efficiency Improved trade arrangements

Real-time/instant payments 24/7 functionality Interoperable Supports digital wallets and mobile payments

Real-time/instant domestic and payments Wide-scale Interoperability Reduced cost Increased access Modernised payment ecosystem

FUTURE STATE

Closing Thoughts

There has been significant progress in the advancement of the payments ecosystem Notwithstanding the achievements, each one building on the earlier progress, some gaps remain The ECCB continues its modernisation efforts to address issues related to interoperability, resilience and cross-border efficiency The ECCU is on the verge of the next phase of innovation to stay apace with global developments

“The payments system should work for all except illicit actors” ~ Timothy N.J.Antoine, Governor - ECCB

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Relentless Focus... Amplified Impact!

THANK YOU FOR YOUR ATTENTION

www.eccb-centralbank.org 869-465-8954 PO Box 89, Bird Rock, Basseterre, Saint Kitts PMFIU@eccb-centralbank.org

Relentless Focus... Amplified Impact!

Eastern Caribbean Central Bank

Oversight with Impact: Safeguarding the ECCU’s Financial System and Protecting the People’s Wealth

ECCB Media Practitioners Workshop

26 March 2026

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Eastern Caribbean Central Bank

ECCB Mission Statement

Advancing the good of the people of the Currency Union by maintaining monetary and financial stability and promoting growth and development.

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Eastern Caribbean Central Bank

What is Financial Stability

Definition: (a) The World Bank states that a stable financial system is one that is “ capable of efficiently allocating resources, assessing and managing financial risks . ” (b) Financial Stability means that the system must be strong enough to facilitate lending, payments, savings/investments, and risk management, even during stress.

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Eastern Caribbean Central Bank

FSSD’s Mission

To provide the highest level of financial stability assurance, and make valuable contributions to monetary policy formulation in support of a stable EC dollar. The department’s mission is directly linked to Article 4 of the Eastern Caribbean Central Bank Agreement. Article 4 requires the ECCB to promote a sound financial structure which entails protecting depositors’ funds , ensuring the soundness of its licensees, and preserving the integrity of the ECCU financial system .

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Eastern Caribbean Central Bank

ECCB RESERVE MANAGEMENT AND BANKING OPERATIONS

Media Workshop 27 March 2026

T r a n s f o r m i n g T h e E C C U T o g e t h e r

3/23/2026

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Eastern Caribbean Central Bank

OUTLINE

1. Why ECCB Holds Reserves and Provides Banking Services

2. ECCB Agreement (1983)

3. Managing the Reserves (Foreign Currency Assets)

4. Supporting Governments and Commercial Banks

5. Key Messages

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Eastern Caribbean Central Bank

RESERVE MANAGER AND BANKER

1. Foreign currency reserve management

a. Management of holdings in foreign currency

b. Supports •

Confidence that the currency union can meet obligations denominated in foreign currency

• The stability of the domestic currency (monetary stability)

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Eastern Caribbean Central Bank

RESERVE MANAGER AND BANKER

2. Banker to commercial banks and member governments

a. For governments: focuses on managing accounts, public debt, credit facilities, and financial advice.

b. For commercial banks: acts as regulator, lender of last resort, and ensures the stability and liquidity of the banking system. c. Both roles support the overarching goal of maintaining monetary stability and economic growth in the Eastern Caribbean Currency Union (ECCU).

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Eastern Caribbean Central Bank

LEGAL REQUIREMENT

1. What defines the ECCB’s role?

a. ECCB Agreement (1983) •

Legal document establishing the Bank

b. Part 6 – External Reserve •

Establishes legal authority for management of foreign currency reserves

c. Parts 8 and 9 – Banker to Commercial Banks and Governments

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Eastern Caribbean Central Bank

MANAGING THE FOREIGN RESERVES

1. EC Dollar pegged to US Dollar since 1976

a. No foreign exchange rate control

b. Requires holdings of US Dollars to meet demand from the public

c. Backing Ratio (legal requirement) – 60.0 percent of demand liabilities must be backed by foreign currency

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Eastern Caribbean Central Bank

BACKING RATIO

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Eastern Caribbean Central Bank

INTERNAL POLICY DOCUMENTS

1. Foreign Reserve Investment Policy a. High level document approved by Board of Directors b. Addresses strategic issues relevant to the management of foreign currency reserves c. Must be consistent with the ECCB Agreement

2. Investment Guidelines a. More detailed document based on the Investment Policy

b. Given to asset managers to ensure that their portfolio management activity remains consistent with the Bank’s objectives c. Approved by the Reserve Management Committee (RMC)

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Eastern Caribbean Central Bank

KEY OBJECTIVES

1. Provide foreign exchange for day to day operational needs;

2. Support and maintain confidence in the fixed exchange rate;

3. Provide confidence that the member countries can service their external obligations;

4. Provide a buffer to absorb balance of payments shocks during times of crisis; and

5. Provide confidence in the ECCB’s monetary policy.

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Eastern Caribbean Central Bank

INVESTMENT OBJECTIVES

1. Capital Preservation – precautionary needs

2. Liquidity – transactional needs

3. Return – subject to capital preservation and liquidity constraints

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Eastern Caribbean Central Bank

RESERVE TRANCHES

1. Liquidity Tranche (transactional needs) i. Investment horizon: 1 month

ii. Market risk tolerance: Not applicable given short horizon

2. Core Tranche (precautionary needs) i. Investment horizon: 1 year

ii. Market risk tolerance: Severely limit potential losses over 1 year

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Eastern Caribbean Central Bank

CURRENCY COMPOSITION

1. Currency denomination of government’s short term foreign debt

member

2. Demand for foreign currency from commercial banks

3. Currency composition of imports

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Eastern Caribbean Central Bank

RISK CONTROL

1. Benchmark Portfolio Approach (Core Tranche)

a. Create a benchmark portfolio that is consistent with a low appetite for loss over one year b. Only use securities that are considered the most liquid and have the lowest default risk c. Consider the performance of the portfolio during multiple economic and interest rate environments

2. Revisit the above on a regular basis and more frequently if needed

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Eastern Caribbean Central Bank

STOP LOSS MECHANISM

1. Introduced in 2024

2. Large unrealized losses can negatively impact the profitability of the Bank

3. Seeks to make a direct link between unrealised losses on the Bank’s balance sheet to the Backing Ratio 4. It forms a second layer of protection against an undesired decline in the Backing Ratio and is sensitive to the Bank’s appetite for accounting losses

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Eastern Caribbean Central Bank

GOVERNANCE

1. Board Investment Committee a. Recommends to Board for approval: i. Investment Policy ii. Benchmark Portfolio

iii. Hiring and termination of asset managers iv. Hiring and termination of custodian

2. Reserve Management Committee a. Approval of the Investment Guidelines b. Supports the BIC

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Eastern Caribbean Central Bank

OPERATIONS

1. Banking and Monetary Operations (BMOD)

a.

Front Office (IMFAU) i.

Execution of portfolio strategy based on set objectives a. Security analysis b. Security selection c. Security trading Reporting on market developments and ad hoc related topics

ii.

b.

Middle Office (RAU) i.

Risk and performance reporting

ii.

Compliance

iii.

Strategic Asset Allocation

c.

Back Office (PSU) i.

Trade Settlement

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Eastern Caribbean Central Bank

OPERATIONS

1. Accounting Department (AD) a. Production of financial information on the reserve assets in compliance with (IFRS) – includes backing ratio

b. Implementation of accounting related policy decisions

2. Research Statistics and Data Analytics Department (RSDAD) a. Economic Reporting b. Maintenance and reporting on Stop Loss

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Eastern Caribbean Central Bank

BANKER TO GOVERNMENTS 1. Holds and operates accounts for the governments, facilitating day-to-day financial transactions 2. Issues, manages, and redeems government securities, ensuring governments can raise funds efficiently (fiscal agent) 3. Provides short-term credit to governments to help manage temporary liquidity needs 4. Advises on monetary and financial matters

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Eastern Caribbean Central Bank

BANKER TO COMMERCIAL BANKS 1. Maintain banking system stability by monitoring banks’ reserves to ensure they meet minimum liquidity and capital requirements

2. Lender of Last Resort: Provides liquidity support to commercial banks in times of short-term funding shortages, helping maintain banking system stability

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Eastern Caribbean Central Bank

EXTENSION OF CREDIT

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Eastern Caribbean Central Bank BACKING RATIO REVISITED

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Eastern Caribbean Central Bank

AUTOMATED CLEARING HOUSE COLLATERAL MANAGEMENT

1. Checks settle electronically in the ECCU through the Eastern Caribbean Automated Clearing House (ECACH) 2. ECCB is responsible for risk management via ensuring each participant has the required collateral a. Determine the annual collateral requirement for each participant b. Monitors and manages the daily ACH collateral limits and credit available to the commercial banks for Clearing House purposes 3. Banking system stability equals currency stability

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Eastern Caribbean Central Bank

KEY TAKEAWAYS

1. Reserve management is not optional – it is a legal requirement 2. The backing ratio is a discipline mechanism embedded in law

3. The main purpose of reserves is currency stability

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Eastern Caribbean Central Bank

KEY TAKEAWAYS

4. Risk is managed through multiple, reinforcing layers: a. Clear investment objectives and tranching (Liquidity andCore)

b. Explicit risk tolerance (appetite for loss)

c. A benchmark-based framework

d. A stop-loss mechanism linked to the Bank’s backing ratio

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Eastern Caribbean Central Bank

KEY TAKEAWAYS

5. The ECCB balance sheet connects reserve management and our role as banker to commercial banks and governments 6. The ECCB operates within a rule based framework designed to preserve monetary stability

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END

3/23/2026

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Eastern Caribbean Central Bank

From Data to Dialogue: Telling the Story Behind the Numbers Dr. Leah Sahely ECCU Media Houses’ Workshop 27 March 2026

Eastern Caribbean Central Bank

Transforming the ECCU Through Innovation and Collective Action

26-Mar-26

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Eastern Caribbean Central Bank

The Reality of Financial/Economic Communication Today

Transforming the ECCU Through Innovation and Collective Action

26-Mar-26

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Eastern Caribbean Central Bank

The Audience Starts with Basic Understanding

Transforming the ECCU Through Innovation and Collective Action

26-Mar-26

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Eastern Caribbean Central Bank

Unexplained Data Creates a Trust Void

Transforming the ECCU Through Innovation and Collective Action

26-Mar-26

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Eastern Caribbean Central Bank

You Are Not Just a Reporter

Transforming the ECCU Through Innovation and Collective Action

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Eastern Caribbean Central Bank

The Risk: Misinterpretation of accurate data The Example: Inflation falls from 6% to 3% The Reality: 47% of respondents interpreted this incorrectly, assuming it meant things were getting cheaper The Truth: Prices are still rising

The Illusion of Understanding

Transforming the ECCU Through Innovation and Collective Action

26-Mar-26

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Eastern Caribbean Central Bank

Simplification Requires Translating Maths into Reality

The No. 1 skill in economic communication is simplification

Transforming the ECCU Through Innovation and Collective Action

26-Mar-26

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Eastern Caribbean Central Bank

The Translation Pipeline

Transforming the ECCU Through Innovation and Collective Action

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Eastern Caribbean Central Bank

The Pipeline in Action

Transforming the ECCU Through Innovation and Collective Action

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Eastern Caribbean Central Bank

Four Questions to Ask Before Publishing

Transforming the ECCU Through Innovation and Collective Action

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Eastern Caribbean Central Bank

The Complete Master Translation Toolkit

Use this workflow everytime you receive raw ECCB data to guarantee the public will understand

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Eastern Caribbean Central Bank

You Shape Public Understanding • Clarity builds trust. • Context prevents confusion.

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Eastern Caribbean Central Bank

Have any questions?

Transforming the ECCU Through Innovation and Collective Action

26-Mar-26

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ECCB PEG 50TH

ANNIVERSARY

Presented by Dr Valda F. Henry

27 March 2026

Unshaken.

Unchanged.

50 Years.

The EC Dollar Peg

A Foundation of Stability Since 1976

Historical Highlights

• The peg was established on July 7, 1976, remains unchanged at EC$2.70 to US$1.00.

• Previously pegged to the British pound sterling

• The Peg was changed to align with the region's major trading partner, the United States.

Why the PEG Matters

• Supports Economic Stability Foreign reserves 99.1% backing ratio - Foreign reserves Backing of 99.1%, as at March 20, 2026, compared to the statutory requirement 60%

• Anchors Inflation - maintain relatively low inflation, a veraging 2 – 3% historically

• Fostering Investor Confidence across the eight member nations

• Enhances Policy Discipline

Resilience of the XCD – USD Peg

1976: Peg established at 2.70 XCD = 1 USD.

1980s – 1990s: Peg withstands global shocks (oil crises, debt issues).

2000s: Peg continues through financial crisis

2021: Introduction of DCash, a digital currency by ECCB.

2010s: ECCB launches modernization efforts.

2026 (Today): Peg remains intact.

Reserve Strength

What Sustains the Peg

 Strong foreign reserves

 Fiscal discipline

 Sound policy coordination

 Continuous economic surveillance

Looking Ahead

 Global volatility persists

 Peg remains a stabilizing anchor

 Confidence in continuity

 No shift in exchange regime

Strategic Outlook

• Tourism & Trade reinforce USD linkage

• Payment Modernisation improve efficiency

• Resilience Building remains key

• Global Shifts: Closely monitored

The Legacy Continues

 50 years of Stability

 50 years of Confidence

 50 years of Resilience

 A Foundation for the Future

Activities for the PEG 50th Anniversary Celebrations

 Jingle, Logo and Theme - Internal - ganering the creativity of our Staff

 PEG Walk - (as of February 2026), statutory requirement 60%

 ESSAY Competition - (Secondary and Tertiary institiutions)

 Updating the Virtual museum

Activities for the PEG 50th Anniversary Celebrations

 Did you Know Series - PEG Edition (Bingo to encourage engagement and participation in the series)

 Panel Discussion with Regional Luminaries

Enduring Principle

“Stability is not an accident—it is a policy choice.”

Thank You! Celebrating 50 Years of Stability

Eastern Caribbean Central Bank

OVERVIEW OF THE OFFICE OF FINANCIAL CONDUCT (OFC )

Prepared for ECCB Communications Workshop For ECCU Media Practitioners

26 – 27 March 2026

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Eastern Caribbean Central Bank

BACKGROUND

In February 2024, the Monetary Council granted approval and support for the creation of an Office of Financial Conduct (OFC) with responsibility for market conduct/financial consumer protection

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FREQUENTLY USED TERMS

The term market conduct is frequently used interchangeably with financial consumer protection, but it can also cover other areas of regulation and supervision. Market conduct connotes a broader focus regarding ensuring and promoting the proper functioning of financial markets to achieve fair and beneficial consumer outcomes.

Financial Consumer Protection refers to laws, regulations and other measures generally designed to ensure fair and responsible treatment of financial consumers in their purchase and use of financial products and services and their dealings with financial services providers.

Market Conduct means how Licensed Financial Institutions uphold the interests of financial consumers so that they are treated fairly, offered suitably designed products, provided with the necessary disclosures to make informed

decisions, and have an avenue for addressing complaints.

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Eastern Caribbean Central Bank

OFFICE OF FINANCIAL CONDUCT IN A NUTSHELL

The OFC will be responsible for market conduct supervision for financial institutions licensed under the Banking Act

The OFC will conduct off-site supervision & onsite examinations as well as alternative dispute resolution (ADR)

OFC will be established within the ECCB as a separate department

The OFC will refer complex consumer complaints to a Financial Dispute Resolution Commission

The OFC is concerned with LFIs upholding consumer protection principles

The OFC will administer Codes of Conduct

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OBJECTIVES OF THE OFFICE OF FINANCIAL CONDUCT

the market from unfair and exploitative practices by financial institutions. unethical and predatory practices that may undermine consumer confidence in the financial sector provision of adequate and clear information and disclosure of material information access to complaint redress mechanisms that are free, fair, timely, transparent, accessible, and independent

Protect

Mitigate

Ensure

Ensure

Encourage

transparency of institutions in their dealings with consumers

Ensure

a competitive financial sector environment

Ensure

access to a basic suite of financial services

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FUNCTIONS OF THE OFFICE OF FINANCIAL CONDUCT

Promoting consumer awareness, confidence and empowerment.

Promoting and advancing the welfare of financial consumers.

Mitigating possible risks that financial consumers may encounter.

Maintaining fair, accessible, efficient and sustainable financial sector.

Protecting financial consumers from unjust financial business practices, deceptive or fraudulent conduct.

Promoting fair financial business practices.

Encouraging responsible and informed consumer choice and behaviour.

Providing accessible, efficient and effective system of redress.

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POWERS OF THE CENTRAL BANK

Mystery Shopping 

Market Conduct Examination

Inspect and Copy Documents in Investigation

Make a Test Purchase

Request Documents, Information, or Evidence

Financial Service/ Product Review

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DUTIES OF LICENSED FINANCIAL INSTITUTIONS

Train and educate financial consumers, agents and staff

Treat financial consumer equitably, honestly and fairly Exercise duty of care regarding financial products and services Fair treatment incorporated in governance principles

Have internal monitoring mechanism for staff, agents and third parties

Give special consideration to vulnerable consumers

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WHAT THE OFFICE OF FINANCIAL CONDUCT IS CONCERNED WITH… Internal Complaints Handling Procedures

Complaint Procedure

• Multiple channels, dedicated resources, standard minimum data to be recorded • LFI shall set timeline consistent with Code of Conduct issued by Central Bank • LFI shall inform consumer of recourse to independent redress process • The Central Bank may monitor internal complaints handling process of the LFI

Timeline

Further Redress

R

Central Bank Monitoring

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WHAT THE OFFICE OF FINANCIAL CONDUCT IS CONCERNED WITH... Disclosure, Transparency and Advertising

Disclosure

Transparency

Advertising

• Intelligible, legible and accurate information available. • Information provided in a consistent manner to facilitate comparison. • Dispute settlement and redress procedures published.

Gg

Disclosures made orally and in writing regarding: • Financial contracts; • Personal data collection, processing and use; • Transaction costs, gains and risks; and • Changes in terms and conditions.

Advertisement must not mislead, deceive, conceal or give false information to the public.

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Transforming the ECCU Through Innovation and Collective Action