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ECCB ANNUAL REPORT 2016/2017
T
he financial year ended 31 March 2017 could be
considered an inflection point for the Bank as it
returned to profitability and new work programme
initiatives were embarked upon under new leadership.
Although work on the key strategic priorities: financial
stability, monetary and exchange rate stability and
growth and competitiveness advanced, focus was also
placed on some new initiatives related to improving
the effectiveness of the institution to deliver on its
statutory mandates.
Improvements in international financial markets,
especially in the USA, where some upward adjustments
were made to the Federal Reserve’s policy rate,
recovery in manufacturing and trade, supported by
stable and relatively low oil prices, all contributed to an
expansion in global growth. The favourable external
environment provided the impetus for expansion of
economic activity in the currency union and improved
performance of the portfolio of invested reserves.
Overall, the financial year was dominated primarily
by an intensification of work on implementing key
reforms that support development and modernisation
of the financial sector as well as initiatives aimed
at enhancing the operational and policy making
effectiveness of the ECCB. In addition, there was
significant advancement in the finalisation of a new
Strategic Plan for 2017 – 2021, which seeks to provide a
road map for addressing the challenging international
and regional policy landscape and broader support to
the transformation of the currency union through the
Economic Union Project.
The overview of work pursued and accomplishments
attained during the financial year will be organised
around the following key strategic themes of:Monetary
and Exchange Rate Stability; Financial Sector
Stability and Market Development; Fiscal and
Debt Sustainability; Growth, Competitiveness and
Employment and Organisational Effectiveness.
MAINTAINING MONETARY AND EXCHANGE
RATE STABILITY
A core function of the Bank is to maintain monetary
and exchange rate stability. These are translated into
specific objectives which focus on ensuring that the
parity of the peg to the US dollar is maintained, through
the sufficiency of reserves to ensure convertibility
at the current rate of EC$2.70 to US$1.00. This has
been further broken down into measureable targets
of a statutory backing ratio of 60.0 per cent and an
operational target of 80.0 per cent.
In this regard, the Bank has had a successful record
over its 34-year existence. At the end of the financial
year, the backing ratio stood at 97.39 per cent and
domestic inflation was relatively low and in line with
that in the USA.
There was significant advancement
in the finalisation of a new Strategic
Plan for 2017 – 2021, which seeks to
provide a road map for addressing the
challenging international and regional
policy landscape and broader support to
the transformation of the currency union
through the Economic Union Project.