WILLEMSTAD – The Central Bank of Curaçao and Sint Maarten (CBCS) will intensify research into the effectiveness of monetary policy tools as excess liquidity continues to characterize the banking system.
Under the fixed exchange rate regime, the CBCS relies on reserve requirements, certificates of deposit and the pledging rate to manage liquidity and protect foreign reserves. The bank plans to study how these instruments transmit policy decisions to credit, imports and economic activity.
Research will also focus on interest rate formation, interest rate spreads and the evolving role of fintech, digital banking and potential central bank digital currencies. The CBCS says understanding these dynamics is essential for maintaining confidence in the Caribbean guilder.