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E.C.C.U - Stable and Strong as 53rd Monetary Council convenes

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Left to Right: Governor Sir Dwight, new Chairman ECCB PM Anthony - St. Lucia and former Chairman PM Douglas - St. Kitts Nevis

Tuesday, July 26, 2005 - The outgoing Chairman of the Monetary Council of the Eastern Caribbean Central Bank (ECCB) has painted a picture of growth and strength within the currency union, as the chairmanship of the council changed hands here last week. At the 53rd Handing Over ceremony held at the Bay Gardens Hotel in Rodney Bay, the chairmanship of the council was passed on to Saint Lucia’s Prime Minister Honourable Dr. Kenny Anthony, by Prime Minister of St. Kitts and Nevis Honourable Dr. Denzil Douglas.

The outgoing chairman said under his tenure, the St. Kitts and Nevis headquartered Central Bank sought to address any perceived vulnerabilities affecting the currency union by strengthening its fiscal reform initiatives. As a direct result he noted economic activity within the ECCU had expanded in the first quarter of 2005 over the same period in 2004.  Gross Domestic Product (GDP) a main indicator of economic growth grew by 3.6 % lead by increase activity in the tourism industry and the construction sector, although agriculture and manufacturing recorded slight declines.

The ECCU recorded a surplus of $22 million at the end of March 2005 in its fiscal operations, in contracts to a deficit of $18 million in the corresponding period of 2004.

“This performance was attributed to the expansion in economic activity, improved tax administration and the management of revenue enhancing and reducing measures by some member governments,… I believe that the work of the Tax Commission has assisted in our own heightened activity towards greater fiscal stabilization.”

Current revenue Prime Minister Douglas said stood at 7% above the total in the 1st quarter of 2005 with receipts from taxes on international trade and transactions accounting for most of the increase, while current expenditure decrease by 0.3% over last year. Capital expenditure rose 85% and capital grants increased by 21% reflective of donor support post Hurricane Ivan recovery efforts in Grenada

To facilitate development in accordance with it mandate, the ECCB’s Monetary Council continues to pursue money and capital market expansion. Bank Governor Sir Dwight Venner spoke of the Eastern Caribbean (EC) dollar stability over the past twenty-nine year which has stood at 2.71 to the United States (US) dollar.

Venner noted the increased use of the Regional Securities Market on the part of governments was offering governments an auction platform to receive financial assistance on reasonable terms. Equity firms are also welcome on the exchange with two major regional institutions namely Grace Kennedy of Jamaica and 1st Caribbean International Bank headquartered in Barbados, coming on board recently. Sir Dwight said other non-OECS firms and institutions were also showing keen interest in the securities exchange.

“I mention this to say that the ECSE in now emerging as the regional stock exchange as envisaged by the founders of CARICOM many years ago. We know that the Monetary Council and the Governments of the ECCU will do all in their endeavours to ensure that legislation is passed to ensure that we do become the supreme financial institution with respect to equities in this part of the world,” noted Sir Dwight Venner.

In light of the impending implementation of the CSME Sir Dwight said OECS member states need to dialogue further on ways of strengthening and deepening the integration process of the region, in particular its monetary and financial systems.

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