Tuesday, May 1, 2018
Tuesday, May 1, 2018
The Central Bank of The Bahamas has released its 2017 Annual Report, which contains a summary of the bank’s operations over the year, an analysis of regulatory developments affecting the financial sector and a review of monetary policy, as well as payment systems developments.
The report also provides an examination of the economic and financial environment, both internationally and in The Bahamas during 2017, and presents a comprehensive analysis of the Bbank’s Statement of Accounts for the year ending December 31, 2017.
In terms of the highlights, the bank implemented further exchange control liberalization measures during the year, to allow for several types of businesses to obtain foreign currency financing, within certain prescribed limits.
In addition, focus was placed on strengthening its anti-money laundering/counter financing terrorism (AML/CFT) supervisory regime, by progressing towards continuous oversight of AML/CFT systems in supervised financial institutions, and by creating an Analytics Unit in the Bank Supervision Department.
In addition, the bank refined its risk-based supervisory framework to target specific high-risk firms, through a process called “evergreening”.
During the review period, the bank also sustained its efforts to further modernize payments operations in the country, through the passage of the Payment Instruments (Oversight) Regulations, 2017. Further, the bank’s strategic priorities for 2018, include the implementation of the credit bureau, along with the appropriate supervisory regime to oversee the entity’s operations.
Indications are that the domestic economy sustained it positive growth trajectory in 2017. This was supported primarily by the construction sector, which benefitted from a number of varied-scale foreign investment projects, including the multi-billion dollar Baha Mar development. To a lesser extent, ongoing post-hurricane rebuilding work also helped drive growth.
However, the tourism sector faced challenges, as the passage of several hurricanes through the region disrupted flight and cruise ship itineraries.
Nevertheless, employment conditions improved in November, over the previous year.
With the sharp increase in hurricane-related capital outlays, combined with higher current spending, the overall deficit for fiscal year 2016/17 deteriorated. However, the fiscal gap narrowed over the first half of FY2017/18, as capital expenditure reverted to trend levels and tax revenue expanded. In the financial sector, both liquidity and external reserves grew in 2017, owing in large measure to government’s external borrowing activities.
Given the significant increase in foreign reserve indicators, due to the government’s external borrowings and the positive stimulus to the economy from the rise in high-end hotel capacity, the Central Bank’s Monetary Policy Committee kept interest rates unchanged, allowing the adjustment impact of the end-2016 interest rate easing to take hold.
A comprehensive breakdown of the Statement of Accounts for the year 2017, revealed that the bank recorded a modest decline in total comprehensive income, reflecting a slight decline in revenue, combined with an increase in expenses.