General
Press Releases
Press
Release March
15, 2005
The
Central Bank of Barbados announces modification to its Monetary
Policy
The
Central Bank of Barbados wishes to advise of a modification to
its monetary policy.
Effective
April 1, 2005, the minimum rate of interest payable on deposits
will be increased from 2.25% to 2.75% per annum.
The
increase in the minimum deposit rate has been influenced by two
considerations.
The first is the significant increase in net domestic
assets in the financial system during 2004 which was heavily
influenced by increased credit and was reflected, in the main,
by increased imports of consumer goods and services.
The Bank is also mindful of the fact that interest rates
abroad, particularly in the US, have risen by 1½ percentage
points since the start of 2004.
When foreign rates of deposit are noticeably higher than
domestic rates, there is an incentive for financial resources to
be invested abroad with adverse effects on the balance of
payments.
The
Central Bank has altered its monetary policy stance in order to
encourage more savings at the expense of consumption activities
and simultaneously discourage outflows of capital.
The
modification in monetary policy is being published in the
Official Gazette of March 17, 2005.
2005-03-15
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