The Central Bank of Barbados has given the National Insurance Scheme (NIS) permission to invest US$40 million (BDS$80 million) overseas, boosting its portfolio diversification through access to international markets.
The NIS said on Tuesday that it would invest that amount in international markets on a phased basis.
It currently holds 80 per cent of its investments locally.
“We all know the adage ‘don’t put all your eggs in one basket’,” said Deputy Chair of the NIS Rawdon Adams.
“This new capacity lets the NIS better follow that advice and creates the potential to achieve a 15 percentage point diversification in the currency, country and asset class allocation of the National Insurance Fund over 12 to 15 years. This will significantly enhance the Fund’s risk management and earnings capacity to the benefit of our entire social security system.”
According to the NIS statement, the development implements a critical recommendation of the Revitalisation Reforms for the NIS announced on July 28, 2023, and strengthens the Fund’s capacity to target portfolio management best practice.
“The foreign exchange acquisition is subject to repatriation with six months’ notice in times of national economic need, a condition of long standing in the CBB’s foreign exchange management tool kit for funds invested abroad. The NIS will seek annual renewal of the arrangement,” it added.
(PR/BT)
