WILLEMSTAD – The Centrale Bank van Curaçao en Sint Maarten (CBCS) is changing its Certificates of Deposit program in an effort to improve the management of excess liquidity in the banking system, reduce monetary policy costs and strengthen the transmission of its policies to commercial banks.
The changes will take effect at the beginning of October 2026. Further details are expected to be announced in a separate monetary circular.
Certificates of Deposit, or CDs, are interest-bearing instruments issued by the CBCS to commercial banks. They allow the central bank to temporarily absorb excess money from the banking system.
The program also provides banks with an alternative for keeping part of their available liquidity within the Curaçao-Sint Maarten monetary union instead of investing those funds abroad.
That makes the CD program an important part of the CBCS's monetary toolkit. By influencing how much liquidity remains available in the banking system, the central bank can also influence the amount of credit commercial banks are able or willing to extend.
According to the CBCS, the latest changes are intended to better align the CD program with current market conditions. The central bank wants to reduce the cost of absorbing excess banking liquidity while improving liquidity management and strengthening the way monetary policy works its way through the financial system.
The adjustments come as the CBCS simultaneously raised its pledging rate to 4.50% while leaving the reserve requirement unchanged at 18.50%.
The central bank said the changes to the CD program must remain consistent with its primary objective of protecting external stability and maintaining adequate foreign reserve coverage.
That issue has become more relevant because the CBCS expects gross official reserves to decline by approximately Cg 332 million over 2026, despite having increased by Cg 468.1 million through the end of August. Import coverage is consequently projected to decline from 4.7 months at the end of 2025 to around 4.3 months at the end of this year, still above the three-month benchmark.
The CBCS nevertheless considers the external position of the monetary union strong. It said it will continue monitoring economic developments and adjust its monetary policy instruments when necessary.