Ardwell Irion.
~To help maintain foreign exchange reserves~
PHILIPSBURG--In an effort to maintain a healthy balance of the country’s foreign exchange reserves during the coronavirus crisis, Finance Minister Ardwell Irion and St. Maarten Bankers Association President Derek Downes, on Wednesday, urged the populace to limit their spending of the US dollar and to spend more of the country’s national currency – Netherlands Antillean guilders.
The call was made at a press conference held jointly amongst Irion, Downes and Secretary General of the Tourism, Economic Affairs, Transportation and Telecommunication (TEATT) Ministry Miguel de Weever.
Irion said with fewer cruise and stay-over tourists now coming to the country as a result of the travel and other restrictions associated with COVID-19, there will be less US dollars being injected into the economy. This can ultimately affect the country’s foreign exchange reserves, which is needed. Irion said everyone can assist by using local currency “as much as possible” to help “keep the balance ratio at a comfortable level”.
Downes said the foreign exchange reserves in the country will plummet because there will be less US dollars coming into the economy. St. Maarten will require foreign exchange for imports of items such as medicine, food and fuel for utilities company GEBE to be able to keep the electricity on for residents as much as possible.
He urged consumers to use guilders as much as possible as this will “reduce the pressure” on the foreign exchange reserves “so that we can have reserves to ensure that needed supplies are on the island”.
Downes urged other banks too; for instance, locals who come to borrow “new monies” can be given the funds in guilders. He said there might already be commitments made in a particular currency and if banks already made a commitment, unless the client is prepared to change the currency, that commitment will have to be honoured. St. Maarten is also in the monetary union with Curaçao, which also benefits from the foreign exchange that St. Maarten generates as St. Maarten generates more than it needs for import use.
Downes said while he does not have influence on the banker’s association in Curaçao, they also need to play their part as well. “There is no problem spending guilders. It’s the national currency and businesses have to accept the legal tender of the island. They are not allowed to say they won’t accept guilders.”
He said the slow season started in St. Maarten in March and is likely to continue until November if the situation with the coronavirus is addressed. “We have already lost the season so practically no foreign exchange or very little foreign exchange will be coming in and we can help the situation by spending more guilders,” Downes noted.
