The banking sector in Grenada and other member countries of the Eastern Caribbean Currency Union (ECCU), continues to be stable with signs of improvement in some areas.
This finding was contained in the Financial Stability report for the ECCU which was presented at the just concluded 95th Meeting of the Monetary Council of the Eastern Caribbean Central Bank (ECCB).
Grenada’s Council Alternate, Honourable Gregory Bowen, accompanied by Shari Joseph, Head of the Policy Unit in the Ministry of Finance, attended the February 14, 2020 meeting at the bank’s headquarters in St. Kitts and Nevis.
According to the communique disseminated at the conclusion of the meeting, “The credit union sector continued to grow and is a significant player in the provision of financial services in the ECCU.”
The communique further states that “risks to the stability of the ECCU financial sector were moderate amid changes in the economic and financial landscape. Possible risks to financial stability were identified as slower economic growth, natural disasters, low investment yields, climate change and cyber resilience.”
Overall, “the ECCU financial sector is projected to remain stable in 2020 despite its ongoing challenges.”
Economic growth in the ECCU was estimated at 3.3% in 2019, compared to 3.8% in 2018. Economic growth for 2020 is projected at 3.2% in 2020 and 2.2% in 2021. Globally, economic growth was estimated at 3% in 2019, down from 3.8% in 2018. The projection for 2020 is 3.4%.
The Monetary Council also received the Governor’s Report on Monetary and Credit Conditions in the ECCU which outlined among other things, that “the stability of the EC dollar is firmly entrenched with a 99.0 percent backing by foreign reserves. It supports monetary conditions and sustains investor and consumer confidence.”
The Governor’s Report also noted that “Credit and monetary conditions are projected to remain favourable in the near to medium term.” Credit growth is also expected to
accelerate in 2020 after domestic credit extended by the commercial banking sector was projected to increase by 1.1 at the end of December 2019.
The 96th Meeting of the Monetary Council is scheduled for July 24, 2020 in St. Kitts and Nevis.
