Friday, May 26, 2017
Friday, May 26, 2017
The Central Bank of The Bahamas is pleased to announce the release of its 2016 Annual Report, which comprises a summary of the Bank’s operations over the year, an analysis of regulatory developments affecting the financial sector, a review of monetary policy changes, as well as payment systems developments. It also includes an examination of economic and financial developments both internationally and in The Bahamas during 2016, and presents a comprehensive assessment of the Bank’s Statement of Accounts for the year ending December 31, 2016.
With regard to the key points, the Bank implemented a series of Exchange Control liberalization measures, aimed at expanding the range of current account transacions administered by the commercial banks under delegated authority, while also increasing the investment opportunities available for residents, both locally and internationally. Additional measures, which focussed on increasing domestic firms’ access to foreign currency funding, were also developed during the year.
Other aspects of the report include an overview of the Bank’s Strategic Plan for 2016-2020, which has as one of its main pillars, the enhancement of the supervisory and regulatory frameworks, with particular emphasis on increasing the financial sector’s resilience. The Bank also continued to make progress on developing reform proposals for key regulatory frameworks, including the dormant accounts regime, the Central Bank of The Bahamas Act and the oversight of payment systems.
Despite the disruption to the country caused by the passage of Hurricane Matthew in October, economic activity was relatively stable during the year, with positive impulses from tourism and foreign investment-related activity. In this environment, employment conditions improved modestly. The fiscal outturn, which had improved in FY2015/16, deteriorated over the following six-month period, as the impact of the severe storm led to an increase in spending for the rebuilding of key infrastructure and a disruption in revenue collections. In the financial sector, with the growth in the deposit base outstripping gains in credit, both liquidity and external reserves expanded. Further, banks’ credit quality indicators improved, benefitting from the sale of delinquent mortgages, aggressive debt restructuring and modest inroads from the Government’s Mortgage Relief Programme.
Given the external reserve performance and the positive outlook for foreign exchange earnings, the Central Bank reduced the official Discount rate by 50 basis points to 4.00% in December, while the Prime Rate was lowered by the same magnitude to 4.25% in the ensuing month.
A comprehensive breakdown of the Bank’s Statement of Accounts for the period ended-December, 2016, revealed that the Bank recorded a modest increase in total comprehensive income, as the growth in revenue outpaced the rise in expenses.
For full text reading, please download the attached document