The financial position of the Central Bank of Barbados worsened last year.
The state financial institution posted a loss of $7.3 million, up from $3.7 million in 2013 as it focused on restoring macroeconomic stability to the domestic economy.
In a highlight of its Annual Review of Policy Operation Report, which outlined the bank’s major operational achievements for the year, the bank said, as required by law, its 2014 Annual Accounts were submitted to the Ministry of Finance on March 31, 2015.
“The Bank made a loss of $7.3 million, bringing the accumulated deficit at December 31, 2014 to $22.1 million, an amount that exceeded the Bank’s General Reserve,” the report said.
“In accordance with the Central Bank of Barbados Act, the Minister of Finance transferred to the Bank non-negotiable, non-interest bearing securities of $7.8 million from Government in order to preserve the Bank’s capital from impairment,” the report added.
The financial institution did not provide reasons for the loss.
In a highlight of the review of economic policy, the bank said the domestic economy remained sluggish with real Gross Domestic Product (GDP) estimated to have increased by just 0.3 per cent over 2013. It cited encouraging signs during the year with small increases recorded in the tourism and construction sectors.
The bank noted the financial system remained stable with commercial banks being well capitalized and profitable despite the sluggishness of the economy.
“The prevailing high liquidity conditions in commercial banks continued to constrain the demand for the special credit, insurance, guarantee and trade receivables facilities administered by the Central Bank,” the report said.
It noted that the Government’s 18-month fiscal consolidation measures had managed to reduce the deficit and stabilized the balance of payments. Although there was still some decline, there were higher foreign capital inflows, which helped the foreign reserves to revert to their long-term seasonal pattern.
The bank noted that while the tourist experience in Barbados was now “richer that it has ever been” with a number of initiatives in 2014 that served to enhance the scope of things, there was yet to be a turnaround in the international business and financial services (IBFS) sector.
“The challenges facing the IBFS sector are immense, and we are yet to see a turnaround in the sector, which has seen some erosion of business in the last few years,” the bank said.
The bank added that the priority for the banking sector for 2015 included further enhancement of the regulatory and supervisory framework for licensees and continuation of dialogue with the domestic regional and international banking sectors and regulators toward strengthening home-host relationships and consolidated supervision.
Another economic highlight of last year mentioned by the bank was the continued expansion of photovoltaic for power generation by Barbadian homes and businesses.