WILLEMSTAD, PHILIPSBURG - On December 19, 2018, the Federal Reserve raised the federal funds rate to 2.25 – 2.50%. This is the ninth increase since the historically low level of 0.00 – 0.25% effective from December 16, 2008 to December 16, 2015. Because of the peg of the NAf to the US dollar, the interest rates in the international money market affect the interest rates in the money market of the monetary union of Curaçao and Sint Maarten. An increase of the federal funds rate affects immediately the international money market rates.
The Central Bank of Curaçao and Sint Maarten has therefore decided to increase its pledging rate from 2.00% to 2.50%, effective January 1, 2019. This is the third increase since the historically low level of 1.00% that was effective since December 29, 2008. The previous increases took place on March 20, 2017, and March 27, 2018.