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a8 local
Thursday 29 december 2022
The CBA raised the reserve requirement by 1.0 percentage point

as of December 1, 2022

In line with the Monetary
Policy Committee’s (MPC)
task to evaluate, deter-
mine, and provide trans-
parency on the monetary
policy actions of the Cen-
tral Bank of Aruba (CBA),
the CBA communicates the
following.

During its meeting on No-
vember 22, 2022, the MPC
decided to increase the
reserve requirement from
24.0 percent to 25.0 per-
cent as of December 1,
2022. Accordingly, com- ment to 25.0 percent was banks, which persists well tion:
mercial banks must hold a based mainly on the dimin- above the pre-pandemic Maintaining reserve ade-
minimum balance at the ished pace of decline in and precautionary levels. International and official quacy is critical to keeping
CBA equal to 25.0 percent the commercial banks’ ex- reserves the fixed exchange rate
of their clients’ short-term cess liquidity, as well as the The MPC considered the The international reserves, between the Aruban florin
deposits. The decision to still ample level of excess following information and comprising the official re- and the US dollar. In this re-
expand the reserve require- liquidity at the commercial analysis during its delibera- serves of the CBA and for- gard, the CBA anticipates
eign reserves held by the international reserves to
commercial banks, grew remain comfortably above
by Afl. 42.0 million (Graph the minimum required three
1) on November 4, 2022, months of current account
compared to end-Decem- payments. Among others,
ber 2021. Official reserves current account payments
contracted by Afl. 16.4 consist of import payments,
million, while the foreign interest payments made to
reserves held by the com- investors, and foreign trans-
mercial banks widened fers such as money remit-
by Afl. 58.5 million. Con- tances by foreign workers.
sequently, on November
4, 2022, official and inter- Official reserves are fore-
national reserves stood at casted to stay within an
Afl. 2,728.5 million and Afl. adequate range when
3,171.6 million, respective- benchmarked against the
ly. For the rest of 2022, the International Monetary
CBA expects strengthened Fund’s (IMF) Assessing Re-
international and official serve Adequacy (ARA)
reserves due to increased metric.q
foreign exchange inflows
from tourism.