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2018 Annual Economic and Financial Review
DOMESTIC ECONOMIC DEVELOPMENTS
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Eastern Caribbean Central Bank
confidence appeared to have remained
elevated, as evidenced by a 3.6 per cent
increase in total annual subscriptions to
$1,716.1m. There was a marginal decline in
demand by investors for instruments issued on
the market during the year, as indicated by the
behaviour of the bid-to-cover ratio (value of
bids received/value of bids accepted), which
moved to 1.33 from 1.34 at the end of
December 2017.
The Government of Saint Lucia remained the
most active on the RGSM, accounting for
34.5 per cent of the volume of auctions,
becoming the holder of the highest gross value
of securities (38.8 per cent). The Government
of St Vincent and the Grenadines followed
with 25.9 per cent of the total value issued.
Issuances by governments of Antigua and
Barbuda, Grenada and Dominica accounted
for 19.8 per cent, 9.2 per cent and
6.2 per cent, respectively. Two member
governments improved their participation in
2018, when compared with issuance activities
in the prior year, with the larger increase
coming from Saint Lucia (131.8m). On the
contrary, three governments reduced their
participation, with the largest decrease in
value coming from Grenada ($72.0m).
The rates on the instruments differed based on
the term to maturity and tended to be lower
for short-dated securities and higher for long-
term issues. The average weighted yield on
91-day T-bills fell by 27 basis points to
2.74 per cent at the end of 2018. For 180-day
T-bills, the rates decreased by 22 basis points
to 3.21 per cent. The weighted average yield
on the 365-day T-bills fell by 47 basis points
to 4.01 per cent. Regarding the movements of
rates for limited medium-term instruments,
the weighted average yields on the 7-year
bonds fell by 68 basis points to 6.25 per cent,
while the yield for the 8-year bond, introduced
for the first time in 2018, was 7.02 per cent.
The yield on a 10-year bond was
7.30 per cent, five basis points lower than
December 2017.
Banking Sector Developments
From the perspective of the Currency
Union, monetary liabilities (M2) expanded
by 2.9 per cent to $16,872.8m during 2018,
compared with growth of 3.4 per cent
during the previous year.
Growth in M2 was
sustained by expansions in both narrow money
(M1) and quasi money. M1 grew by
6.8 per cent ($285.6m), fuelled largely by
increases of 7.4 per cent ($237.9m) in private
sector demand deposits and 5.6 per cent