Bahamas' external reserves down to B$2.2 billionFriday, April 09, 2021
The Central Bank of The Bahamas (CBOB) is reporting that external reserves dropped by B$62.8 million to B$2.2 billion last month, following the expected trend laid out by its governor over the course of the novel coronavirus pandemic.
Government borrowing bolstered reserves to B$2.3 billion at the end of 2020.
“This decrease was reflective of the ongoing travel restrictions related to the COVID-19 pandemic, combined with the demand for foreign currency by the public sector and the commercial banks. In particular, the central bank's foreign currency transactions with the public sector reversed to a net sale of B$48.8 million, from a net purchase of B$9.1 million in 2020,” the bank stated in its Monthly Economic and Financial Developments Report for February released Monday this week.
“Similarly, the bank's transactions with commercial banks switched to a net sale of B$15.1 million, from a net purchase of B$91.2 million in the preceding year, as commercial banks reported a net sale of B$16.3 million to their customers, following a net intake of B$80.3 million a year earlier,” the report said.
However, CBOB further stated that domestic demand for foreign currency dropped by B$132.4 million in February, with sales amounting to B$373 million.
“Primarily, purchases of foreign goods and services via credit and debit card transactions decreased by B$116.4 million, while oil imports and travel-related payments fell by B$14.8 million and by B$9.3 million, respectively,” the CBOB stated.
“In a partial offset, foreign currency sales rose for factor income (B$3.6 million), non-oil imports (B$2.8 million) and transfer payments (B$1.9 million).”
The continued loss of foreign reserves is expected to be maintained at least until there is a rebound in the country's tourism product, the bank stated. That return is expected to remain sluggish during 2021, as COVID-19 travel restrictions remain in place.
The central bank reported an 86.9 per cent decline in total visitor arrivals during January, revealing that there were only 16,098 international departures from Lynden Pindling International Airport.
On the other hand, vacation home rentals continue to strengthen, with a recorded 24 per cent increase in room nights sold.
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