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| The Central Bank of Barbados said that it was also strengthening its off-site surveillance of foreign exchange transactions through development of an electronic data interface with commercial banks and other Authorised Dealers, to facilitate monitoring when further liberalisation occurs. | |
BRIDGETOWN, Barbados, October 23, 2008 - The Central Bank of Barbados is freeing up exchange controls to facilitate easier transactions by Caribbean Community (CARICOM) nationals, as the country moves to fulfill commitments to the CARICOM Single Market and Economy (CSME).
A statement issued by the Bank said the decision to liberalise the exchange controls was also a continuation of a strategy of gradual and measured economic and financial reform. It said the aim was "to enhance the business climate, improve efficiency and attract foreign investment, within the context of maintenance of the fixed exchange rate".
With the Central Bank relaxing its rules, Authorised Dealers are now permitted to grant an advance (by way of loan, overdraft, indemnity or guarantee), to a CSME resident individual to facilitate reasonable settling-in expenses, including furniture, equipment, household appliances and motor vehicles, without limit, except for acquisition of real estate.
They will also allow lending to a company operating in Barbados and controlled by CSME residents, up to a maximum of BDS$1 million (US$500,000) per year. No permission has been given for advances to acquire real estate in either case.
Noting that CSME residents will have the same facilities available to them as Barbadian residents in a fully liberalised CSME environment, the Bank said that it would allow Barbadians earning foreign exchange to keep up to 30 per cent in that foreign currency, while the rest would have to be in Barbados dollars. This, it said, would allow residents some of the privilege given to other CSME residents in similar situations, who are now able to retain their earnings in foreign currency.
"While this does not exactly level the playing field, it is the first manageable step in that direction. It is also hoped that this will encourage Barbadians holding foreign currency abroad (which is earning very little in the context of the current very low international interest rate regime) to repatriate funds to Barbados," the statement said.
The Central Bank said that it was also strengthening its off-site surveillance of foreign exchange transactions through development of an electronic data interface with commercial banks and other Authorised Dealers, to facilitate monitoring when further liberalisation occurs.
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