The Central Bank Of The Bahamas’ Contribution To The
2016-2017 Budget Communication
$154.5 million over the remaining months. As a result, the average monthly external reserve
Annex A
balance narrowed to $866.6 million relative to $897.6 million in 2014. At end-December, the
stock of external reserves stood at approximately 13.7 weeks of total merchandise imports, visà-vis 11.5 weeks in the prior year.
In interest rate developments, the weighted average loan rate rose by 48 basis points to
12.29%, reflecting declines in both the residential and commercial mortgage rates of 68 and 7
basis points, to 6.48% and 7.95%, respectively.
In contrast, rates on both overdrafts and
consumer loans firmed by 60 and 36 basis points, to 10.36% and 14.26%, respectively.
In terms of deposits, the weighted average interest rate fell marginally by 1 basis point
to 1.41%. The average rate for savings balances decreased by 6 basis points to 0.83%, while the
average range on fixed deposits narrowed to 1.09%-1.71% from 1.16%-1.76% a year earlier. In
contrast, the average rate on demand deposits edged up by 1 basis point to 0.30%.
The trends noted in 2015 were sustained over the first quarter of 2016, as both banking
sector liquidity and external reserves firmed over the review period, buoyed by the receipt of
proceeds from the Government’s US$100 million equivalent external loan and to a lesser
extent, net foreign currency inflows from real sector activity.
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2016/2017
DRAFT
ESTIMATES
OF REVENUE &
EXPENDITURE
Total Bahamian dollar credit decreased by $48.2 million during the first quarter of 2016,
after the prior year’s $59.4 million contraction. In terms of the components, the falloff in
private sector credit slowed by more than one half to $19.6 million from $41.7 million in 2015,
as mortgages were relatively flat in comparison to a $24.1 million reduction in the previous
period and the decline in consumer credit narrowed to $13.3 million from $17.6 million in 2015;
however, commercial loans, which were relatively unchanged in the prior period, fell by $6.2
million. Further, credit to the rest of the public sector increased marginally by $0.7 million, a
turnaround from the $0.4 million decline a year earlier. In a slight offset, the reduction in net
claims on the Government widened to $29.3 million from $17.3 million in 2015.
At end-March 2016, external reserves stood at $980.5 million, a gain of $171.6 over the
quarter and exceeding the growth of $51.8 million recorded in the preceding year.
CREDIT QUALITY
Banks’ credit quality indicators improved modestly over the first quarter, as total private
sector loan arrears decreased by $21.6 million (1.8%) to $1,198.0 million and the attendant loan
ratio narrowed by 30 basis points to 20.0%. The reduction in loan delinquencies was led by a
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