NASSAU, BAHAMAS — The country’s external reserves increased to $2.6 billion in March, though noticeably lower than the prior year’s growth which included proceeds from government’s external borrowings.
Central Bank Governor John Rolle yesterday noted, “As of the beginning of May, the external reserves measured approximately $2.7 billion, still a healthy position. On a seasonal basis, these balances are expected to peak later in the year, before being drawdown over the closing months of the year. The reserves are expected to end 2023 below their closing levels of 2022. This is in keeping with stronger private sector demand for imports of goods and services, some of which could be driven by expanded private sector credit.”
According to Central Bank in its monthly economic and financial developments report for March, the country’s external reserves grew by $4.1 million to $2,671.5 million, notably lower than the prior year’s growth of $513 million, which included proceeds from government’s external borrowings. The regulator also noted that its foreign exchange transactions with the public sector switched to a net sale of $93.2 million from a debt financing-related net purchase of $419 million in 2022.
“Providing some offset, the Bank’s net purchases from commercial banks almost stabilized at $95.3 million. Meanwhile, commercial banks’ net intake from their customers slowed to $93 million from $108.1 million a year earlier,” the Central Bank stated.
“For the first quarter of 2023, the growth in external reserves moderated to $76.9 million, from $514.8 million in 2022. The Central Bank’s transactions with the public sector reversed to a net sale of $55.4 million, vis-à- vis a net purchase of $310.4 million in the preceding year. In addition, the Bank’s net purchases from commercial banks tapered to $128.9 million from $212.5 million in the prior year. In tandem, commercial banks’ net intake from their customers moderated to $124.5 million from $266 million last year,” the regulator noted.
Central Bank data also revealed that foreign currency outflows increased by $3.1 million to $539.4 million, relative to the comparative period in 2022.
“Leading this outturn, payments for “other” current items—primarily credit and debit card transactions—grew by $28.4 million. Further, outflows for travel-related transactions rose by $3.2 million. In contrast, factor income remittances declined by $11.6 million, while outflows for oil imports fell by $11.5 million. Further, outflows for non-oil imports decreased by $3.2 million, and for transfer payments, by $2.2 million,” the regulator wrote.
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