The mission of the Centrale Bank van Curaçao en Sint Maarten is to promote the country’s long-run economic growth. Can you tell us more about the role of the Centrale Bank van Curaçao en Sint Maarten?
We are a typical central bank, but we have three primary roles, if you will.First, we provide external stability. This means ensuring that the exchange rate of the guilder with the US dollar is fixed, avoiding volatility. This stability imports low inflation from the US dollar region, which has kept inflation relatively low over decades. However, global inflationary pressures, like rising energy costs, can still affect us.Second, we supervise financial institutions in the monetary union of Curaçao and Sint Maarten, ensuring they remain financially sound, capable of repaying deposits, and encouraging economic growth. We also ensure compliance with international standards like AML and CFD requirements to maintain the integrity of the financial system.Third, we manage payment circulation. Although the commercial banks run the payment system, we facilitate their operations and connect them to the international payment system.Sometimes, I add a fourth role: economic advice. We provide quarterly economic projections for St. Maarten and Curaçao.
What is your monetary policy for 2025?
With a fixed exchange rate, the room for maneuver is limited—we closely follow US interest rates. If we set a lower rate than the US, capital could flow out, depleting reserves and risking depreciation. Maintaining our peg requires aligning with the US rates.For 2025, we expect the US Federal Reserve to lower rates as inflation stabilizes toward their target. This could bring our interest rates down to around 3%, but it will depend on economic data and global conditions.
Which measures have been taken by the Centrale Bank van Curaçao en Sint Maarten to help stabilize government revenues and reduce external debt?
Managing public debt is primarily the government's responsibility. We only act as an agent, facilitating bond issuance for capital expenditure. In Sint Maarten the budget is supervised by the Kingdom's College of Financial Supervision. They require a balanced budget for current expenditures, allowing borrowing only for capital expenditures, such as addressing urgent needs like safeguarding electricity generation in Sint Maarten.
What are the Centrale Bank van Curaçao en Sint Maarten major plans and projects for 2025 and long-term?
For Sint Maarten, we foresee continued economic growth as hotel and short-term rental capacities increase. The tourism strategy is shifting from shopping-focused to experience-based offerings, capitalizing on Sint Maarten's natural beauty and unique culture. While growth will moderate after 2025, the island remains its tourism led growth model.
What Environmental, Social and Governance (ESG) practices does the Centrale Bank van Curaçao en Sint Maarten implement?
We focus on climate risk adaptation and resilience. We're translating Intergovernmental Panel on Climate Change scenarios into damage assessments for Curaçao and Sint Maarten, raising awareness among financial institutions to incorporate climate risks into their planning. Internally, we've reduced our carbon footprint by installing solar panels and electrifying vehicles.
Could you share withus your vision about the banking sector in Sint Maarten and how can it be further developed?
The sector is mature, but financial inclusion remains a challenge, with around 17% of people lacking bank accounts. Digitalization is the future, but there are social nuances, like people valuing a visit the branch as a way to connect with people. Climate risk, especially rising reinsurance costs, is a great and increasing concern threatening access to insurance and mortgages.
What is your final message for Newsweek readers who consider Sint Maarten as a potential investment destination?
Sint Maarten is an investment-grade island in the Caribbean, offering stability and growth opportunities for investors and a unique experience for tourists.
