NOTES TO THE FINANCIAL STATEMENTS AT 31ST DECEMBER, 2013
(continued)
19.
FINANCIAL RISK MANAGEMENT (continued)
On Demand
Up to 1 year
1 to 5 years
Over 5 years
Total
Financial liabilities
Members’ deposits
Members’ regular shares
Borrowings
Non-interest bearing liabilities
Other liabilities
Balance at 31st December, 2012
67,361,735
30,303,703
1,113,870
725,766
5,268,795
810,915
766,302
-
19,408,862
5,064,095
2,564,851
-
21,265,941
1,332,655
636,720
-
67,361,735
76,247,301
7,207,665
5,081,743
725,766
$99,505,074
$6,846,012
$27,037,808
$23,235,316
$156,624,210
Currency Risk:
Currency risk is the risk that the value of future cash flows of financial instruments will fluctuate due to
changes in foreign exchange rates. The Credit Union operates primarily in Eastern Caribbean Currency
and is therefore not subject to significant foreign currency risk. However, some of the Credit Union’s
transactions are in United States dollars but as the Eastern Caribbean Dollar is fixed to the United States
Dollar, there is no significant currency risk exposure.
Interest Rate Risk:
Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctu
ate because of changes in market interest rates.
80
Exposure to interest rate risk
Floating rate instruments expose the Credit Union to cash flow interest risk whereas fixed rate instru
ments expose the Credit Union to fair value interest rate risk.
Management of interest rate risk
The Credit Union’s exposure to interest rate risk is managed through the matching of funding products with financial ser
vices and monitoring market conditions and yields.