The Central Bank Of The Bahamas’ Contribution To The
2016-2017 Budget Communication
between banks and other large institutions, which are conducted through the Central Bank’s
corresponding value expanded by 23.4% to $22.2 billion.
Card-based transactions are rapidly gaining popularity throughout the country, given
their convenience and relative safety as a means of payment. During the year, the number and
value of debit card transactions firmed by 8.3% and 50.8% to 7.8 million and $9.5 billion,
respectively. Further, the number of credit cards issued rose by 19.8% to 190,712; however the
Annex A
Real Time Gross Settlement (RTGS) system, rose by 15.9% to 75.7 million, while the
unpaid balances firmed only marginally by 1.2% to $249.2 million, as consumers continued to
deleverage and consolidate existing high interest credit card debts.
MONETARY & CREDIT DEVELOPMENTS
In 2015, monetary developments featured robust growth in liquidity and moderate gains
in external reserves, owing to the persistent weakness in private sector credit demand, which
stood in contrast to net foreign currency inflows from real sector activities and sustaine d but
sharply tapered net public sector external borrowings. In terms of interest rates, the weighted
average spread on domestic banks’ loans and deposits widened, reflecting a decline in the
average deposit rate and an increase in the corresponding lending rate.
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Attributed mainly to growth in lending to the public sector, total domestic credit rose
by $102.0 million (1.2%), to reverse the previous year’s $85.7 million (1.0%) reduction. In
particular, the banking system’s net claims on the Government expanded by $176.6 million
(8.7%), a reversal from a $78.1 million (4.0%) decrease in 2014, reflecting a build-up in holdings
of Bahamas Government Stock (BGS). Given the high levels of loan arrears, private sector
credit contracted by a further $68.0 million (1.1%), following a $184.1 million (2.8%) decline in
the prior year, when $100 million in non-performing loans were transferred from a domestic
bank to a Government owned special purpose vehicle (SPV). In addition, credit to the rest of
the public sector contracted by $6.6 million (1.4%), in contrast to the prior year’s $20.3 million
(4.5%) expansion, when a health-related facility increased its outstanding liabilities.
External reserves firmed modestly by $24.3 million (3.1%), following a $46.1 million
(6.2%) expansion in the preceding year, for an end-December 2015 balance of $811.9 million.
Underpinned by tourism receipts during the key winter season, external balances expanded
during the first seven months of 2015, to peak at $966.5 million in July. However, in line with
seasonally elevated domestic demand for foreign currency, reserve balances fell by an estimated
10
2016/2017
DRAFT
ESTIMATES
OF REVENUE &
EXPENDITURE