Press Release:-  The Ninety-First Meeting of the Monetary Council of the Eastern Caribbean Central Bank (ECCB) was held under the Chairmanship of Dr The Right Honourable Keith Mitchell on 27 July 2018, at the Radisson Grenada Beach Resort, Grand Anse, St George’s, Grenada.

1.0         Monetary Stability

Council received the Governor’s Report on Monetary and Credit Conditions in the Eastern Caribbean Currency Union (ECCU).  The report assessed the recent trends in monetary and credit conditions for the period April 2017 to March 2018, within the context of the Bank’s broader objectives of ensuring the stability of the exchange rate and the financial system.

Council was apprised of the following:

• Global output is estimated to have risen to 3.8 per cent in 2017 and is forecast to continue rising in 2018 and 2019 to a projected 3.9 per cent.
• With strong global economic growth, it is anticipated that ECCB member countries will benefit from positive spill-overs including increased Tourism, Foreign Direct Investment and Remittances.
• Money and credit conditions continued to show a general improvement but domestic credit conditions were less than optimal. Domestic credit fell by 1.2 per cent to $9.7 billion.
• Growth in money supply increased by 4.1 per cent to $17.1 billion as at 31 March 2018.
• The Currency Union’s exchange rate arrangement continued to be supported by a strong and growing stock of foreign currency reserves.

Having considered the state of monetary and credit conditions, Council agreed to maintain the Minimum Savings Deposit Rate at 2.0 per cent and the Central Bank’s discount rate at 6.5 per cent. The Minimum Savings Rate is the lowest rate that commercial banks can offer on savings deposits.  The Central Bank’s Discount Rate is the rate at which the ECCB lends to commercial banks and governments.

2.0         Financial Stability

Council was informed that as at 31 March 2018, the ECCU banking sector was assessed as stable. Although, generally speaking, banks are in compliance with capital requirements, there is a need to strengthen capital given the impact of non-performing loans (NPLs), growth strategies and the likely effects of Basel II/III and IFRS 9 requirements.

With respect to the banking sector, Council also noted, that as at 31 March 2018:

• Total assets increased by 3.9 per cent to $30.8 billion (156.3 per cent of GDP);
• Deposits increased by 3.6 per cent to $21.6 billion (109.6 per cent of GDP);
• Loans and advances had a nominal contraction of 0.1 per cent to $12.2 billion (61.9 per cent of GDP); and
• The non-performing loan ratio increased from 10.9 per cent to 12.0 per cent.

Council was updated on the status of the ECCU Credit Bureau Project. It noted that following Requests for Proposals, two firms had been shortlisted and site visits were being planned.  It is anticipated that the Evaluation Committee will recommend a firm by September 2018 and that firm will be licensed to operate by December 2018.   Council reaffirmed its desire to have the Bureau launched by June 2019.

Council was notified of the reconstitution of the Eastern Caribbean Payments Council (ECPC). Given the importance of a stable, efficient and secure payment system, Council fully endorsed the objectives and functions of the reconstituted ECPC and gave its commitment to support further developments including the modernisation of the ECCU Payments System.

3.0         Growth and Competitiveness

As it relates to growth, Council noted that real economic activity is projected to expand by 1.7 per cent in 2018.

Council was briefed on the status of the Eastern Caribbean Partial Credit Guarantee Corporation (ECPCGC) Agreement which came into being on 7 May 2018, noting that six participating governments had enacted the legislation and funding was secured from The World Bank with St Kitts and Nevis self-financing. The ECPCGC is scheduled to become operational by December 2018. Council ratified its decision on the nominees for the ECPCGC Board of Directors.

Council noted the recent dialogue between the ECCB and the Central Bank of Trinidad and Tobago exploring various options to address issues related to the difficulties with payment settlement for traders selling agricultural produce in Trinidad and Tobago.

4.0         Report from the Technical Core Committee on Insurance (BAICO and CLICO)

Council was informed that, of the funds available for distribution, 98 per cent was distributed to EC Dollar policyholders, and 76 per cent to US Dollar policyholders under the Plan of Arrangement (BAICO and CLICO) Act on 18 December 2017.

5.0         Change of Substrate for ECCB Banknotes

Council ratified its decision on the designs for the new family of ECCB polymer banknotes. Polymer notes offer the advantages of more advanced security features and greater durability.  Circulation of the new notes is scheduled for mid-2019.

6.0         Date and Venue of 92^nd Meeting of the Monetary Council

Council agreed to the convening of the 92^nd Meeting of the Monetary Council on Friday, 26 October 2018 via videoconference.

7.0         Attendance

Council Members who attended the meeting were:

1. Dr The Right Honourable Keith Mitchell, Prime Minister and Minister for Finance, Grenada (Chairman)
2. Hon Victor F Banks, Chief Minister and Minister for Finance, Anguilla;
3. Hon Gaston Browne, Prime Minister and Minister for Finance, Antigua and Barbuda;
4. Hon Roosevelt Skerrit, Prime Minister and Minister for Finance, Commonwealth of Dominica;
5. Hon Donaldson Romeo, Premier and Minister for Finance, Montserrat;
6. Dr the Hon Timothy Harris, Prime Minister and Minister for Finance, St Kitts and Nevis;
7. The Hon Camillo Gonsalves, Minister for Finance, St Vincent and the Grenadines; and
8. Senator, the Hon Ubaldus Raymond, Minister of Public Service, Temporary Council Alternate for Saint Lucia.