Economic and Financial Review - June 2019

June 2019 Economic and Financial Review DOMESTIC ECONOMIC DEVELOPMENTS

Grenadines issued the five-year bond, valued at $17.7m, while the government of Antigua and Barbuda raised the two-year bond, valued at $10.0m. Three of the issuing countries recorded declines in the total value of securities issued during the review period as follows: Antigua and Barbuda ($25.0m), Grenada ($10.0m) and Saint Lucia ($38.2m). The total value of securities issued by The Commonwealth of Dominica remained unchanged at $40.0m, while Saint Vincent and the Grenadines recorded an increase of $45.7m in the total value issued. The value of treasury bills offered fell by 3.7 per cent to $471.0m during the first half of 2019, compared to a reduction of 7.2 per cent during the comparable period of 2018. The available data indicate that the bid-to- cover ratio, which represents the proportion of the value of bids received in an auction to the value of bids accepted, inched upwards to 1.51, from 1.43 during the comparable one year prior. The value of bids received rose marginally (0.3 per cent) to $773.6m. All issues, except one, were over-subscribed during the period under review. The exception was a three-year bond issued by

the Government of Saint Lucia, which produced the issue amount of $10.0m.

The weighted average interest rate on the 91-day Treasury bills fell by 24 basis points to 2.40 per cent during the six months ending June 2019. The average yield for the 180-day Treasury bills was 2.45 per cent, compared with 3.4 per cent during the corresponding period of last year. Additionally, the yield for the 365-day Treasury bills decreased by 79 basis points to 4.04 per cent, during the time of review. The yields for the new short-term bonds of two and three years, introduced during the review period, were 6.0 and 5.0 per cent, respectively. The longer-term instruments offered were the 5-year and 7-year bonds, which both yielded 6.25 per cent, in contrast to the previous year when there was no instrument of these types. Trading activity on the secondary market for government securities decreased in both volume and value during the first half of 2019. The value of secondary trading fell to $5.1m from $10.4m during the first six months of last year, as the volume suffered a similar fate, moving to 5.0m from 10.0m during the January to June period of 2018.

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Eastern Caribbean Central Bank