WILLEMSTAD – The Central Bank of Curaçao and Sint Maarten (CBCS) continues to rely on its long-standing policy of pegging the Caribbean guilder to the U.S. dollar, a strategy the International Monetary Fund (IMF) says remains central to financial stability in the monetary union.
According to the IMF review, the primary objective of monetary policy is to maintain a stable exchange rate, reflecting the high level of trade conducted in U.S. dollars.
This policy provides predictability for businesses and investors, helping to anchor inflation and support economic activity. However, the IMF notes that despite the importance of this framework, it is not always well understood—even among stakeholders.
A survey conducted as part of the review revealed that many respondents incorrectly believed that the central bank targets inflation directly, rather than focusing on exchange rate stability.
The IMF argues that this gap in understanding highlights the need for clearer communication from the CBCS. It recommends that the central bank publish more accessible explanations of its monetary policy strategy and decision-making process.
Maintaining confidence in the currency peg is particularly important for Curaçao, given its dependence on imports and exposure to global economic developments. Any erosion of trust could have direct consequences for inflation, investment, and overall economic stability.