WILLEMSTAD/PHILIPSBURG--The Central Bank of Curaçao and St. Maarten (CBCS) has announced an increase in lending rates for commercial banks on Curaçao and St. Maarten from one per cent to 1.50 per cent as of March 20. The historically low level of one per cent has been in effect since December 29, 2008. The increase affects the transactions by commercial banks at CBCS.
This comes on the heels of the United States Federal Reserve raising the federal funds rate from 0.75 per cent to 1.00 per cent on March 15. This is the third increase since the historically low level of 0.00 to 0.25 per cent that was used from December 16, 2008 to December 16, 2015.
The linking of the Netherlands Antilles guilder to the US dollars influences the money market interest rates of the monetary union of Curaçao and St. Maarten.
The Central Bank said that, for example, the interest rates CBCS uses for the two weekly auctions of Certificates of Deposit (CDs) for banks are based on the international US dollar London Interbank Bid (LIBID) Rate. An increase in the federal funds rate therefore has a direct effect on the international money market rates.
