Curaçao

CENTRAL BANK CURACAO ST MAARTEN PROJECTED TO LOSE ALMOST FLS 90 MILLION Guilders.

CENTRAL BANK CURACAO ST MAARTEN PROJECTED TO LOSE ALMOST FLS 90 MILLION Guilders. Central Bank wants to increase part license fee to cover losses. Willemstad – The “bank of banks”, the Central Bank of Curaçao and Sint Maarten (CBCS), is also struggling in severe times as a result of the crisis. Between 2020 and 2024, the CBCS projects a loss of 87.5 million guilders.
“It is a projection and not the expected outcome,” says a spokesman. And: ,, It concerns the operating income and costs; the operational budget. Not for Central Bank duties. Our foreign exchange position is excellent. The newspaper Sint Maarten reported about it based on answers from Finance Minister Ardwell Irion to the States in Philipsburg. To the explains the press officer that “as a result of the corona crisis, interest rates on the international market have fallen sharply.” As a result, the interest income of the CBCS decreased, which resulted in a decrease of the interest income of approximately 18 million guilders in 2020. ” According to the Central Bank in Scharloo, international interest expectations indicate that the effects of the corona crisis on interest rates “will still be noticeable until at least 2022-2023”. In preparing its projections for the years 2021 to 2024, the CBCS has therefore assumed that this interest income will also be approximately 18 million less per year and that it will only gradually increase again. ”According to the projections released by the Sint Maarten minister, the following losses are involved: 6.2 million (2020); 5.6 million (2021); 23.1 million (2022); 23.8 million (2023); and 18.8 million (2024). Notable are the projected significant losses next year and beyond, while the corona crisis hit the hardest last year. Not for nothing, therefore, the nuance that the “expectation” turns out differently than this projection. Nevertheless, the CBCS has already implemented several cost-reducing measures, said the spokesperson, who hastens to add that “they do not affect the quality of the statutory performance of duties”. It is about reorganization and shortening the working conditions of the staff. However, more is needed. The Bank Statute states that the moment the reserve fund of the CBCS falls below the required minimum, and the Central Bank cannot supplement this itself, the Countries must clear the reserve fund to the required minimum. “Conscious of the financial situation of the Countries (Curaçao and Sint Maarten, ed.), the CBCS has drawn up a plan that should lead to limiting or elimination of budget deficits and thus also the discharge obligation of the Countries.” The spokesperson tells this newspaper that the plan is based on, among other things, “adjusting the Bank Statute” to “enable more profitable investment of the eligible foreign exchange reserves.” It is also about adapting the existing laws regarding the passing on of supervision costs, so that the possibility is created that CBCS can pass on all supervision costs to the institutions subject to supervision. But also, finally, the agreement with the Countries that for a number of years the CBCS will not have to pay half of the planned increase in the ‘license fee’, but can consider this as part of its income. This concerns an increase of 1 to 1.5 percent. Then 0.25 percentage point would go to the Central Bank. In the case of Curaçao, the 0.5 percentage point increase in the license fee was already intended to pay off 267 million bridging credit provided by the Central Bank to the ailing Girobank. For Sint Maarten it was an extra amount to supplement the (deficits in the) government budget. It is still unknown how the governments in Willemstad and Philipsburg react to these proposals aimed at removing CBCS from the minus figures. https://antilliaansdagblad.com/curacao/23273-crisis-treft-ook-cbcs

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