NASSAU, BAHAMAS — The government has undertaken to amend the Central Bank Act to cover the use of up to $232.8 million worth of International Monetary Fund (IMF) Special Drawing Rights (SDRs) that are held as part of the external reserves of the Central Bank, its Governor John Rolle said yesterday.
Rolle confirmed to Eyewitness News the Central bank is providing additional responses on the issue directly to Opposition leader Michael Pinder who recently expressed concern over the potential use by the government of up to $232.8 million worth of IMF Special Drawing Rights (SDRs) that are held as part of the external reserves of the Central Bank.
“The Central Bank worked closely with the Government in concluding these arrangements to access the SDRs,” Rolle said.
“Under the MOU there is an undertaking by the Government to amend the Central Bank Act, to cover the use of the 2021 allocations. As explained in our public release, the assessment of the foreign reserves adequacy have continued to improve given ongoing recovery in tourism.”
Rolle said: “There is even less uncertainty around the sustainability of the reserves than in 2021. Compared to one year ago, the opportunity cost of not making any use of the SDRs is therefore significantly greater. However, it is not a need that is expressed in terms of foreign reserves adequacy.”
In his statement, Pintard noted that borrowing from the Central Bank is the equivalent of printing money, adding there were legislative limits over its use.
The bank recently announced that it has made arrangements with the Ministry of Finance for the government to have direct access to the $174.8 million in special drawing rights (SDRs) allocated to The Bahamas by the International Monetary Fund (IMF) in 2021.
Pintard also called on the government to publish the Memorandum of Understanding referenced by the Central Bank in its Monthly Economic and Financial Developments report for the month of November.
