The Central Bank of Barbados today announced another modification in its monetary policy.
With effect from November 1, 2005, the minimum rate of interest payable on deposits will be increased from 4.25% to 4.75% per annum.
The most recent statistics available to the Bank indicate that, despite earlier increases in deposits and loan rates, the high demand for credit from commercial banks shows little sign of abating. These loans continue to fuel strong import growth and a reduction in foreign exchange reserves. Moreover, the seasonal pick-up in import growth is now beginning, with the approach of Independence and Christmas.
The Bank’s persistence with a tight monetary policy stance is a signal that the prevailing external imbalance must be brought to a level which is consistent with Barbados’ objective of ensuring macroeconomic stability.