St. Maarten Government opts for dollarization

The future of the Central Bank of Curacao and St.Maarten is uncertain at this moment with both countries reassessing its feasibility. On Wednesday Prime Minister Sarah Wescot-Williams again emphasized the fact that the two countries have not been able to reach common ground on a number of issues but said that it was time for Curacao and St.Maarten to engage each other in a candid manner.
“I think that it is important that both governments come together face to face and look at the decisions that have been taken by both governments and the wishes that have been expressed by both governments. The two governments can agree to disagree as far as the joint monetary system is concerned and decide on the steps moving forward.”

The future of the Central Bank is among the issues raised by parliamentarians Petrus de Weever, Roy Marlin and Patrick Illidge in requesting that bank President drs Emsley Tromp attend a closed door Central Committee meeting to appraise the legislators of the bank’s most recent developments. They also want drs Tromp to discuss the events that led to the implementation of a credit freeze on both islands, political influences affecting the bank and the currency for St. Maarten and Curacao.
With drs Tromp expected to arrive on the island today the Prime Minister said, “I believe that those type of consultations or discussions are important.” She suggested that the discussion become broadened to include the “macro-economic perspective for St. Maarten.”

On March 14, the Central Bank issued a directive for commercial banks to freeze giving out private credit for six months. The announcement came after several warnings were issued from August of last year based on the macro-economic outlook of both Curacao and St.Maarten. The Central Bank is now using the measure to deal with rising current account deficits and declines in the foreign exchange reserve.
“The prices have gone up drastically and all of these factors tie in one way or another,” the Prime Minister opined.

While Curacao’s parliamentarians have called for the dissolving of the Central Bank, St.Maarten has been making a case for the independent branch of the bank on St.Maarten.
“That was part of the agreements that were reached pertaining to the joint monetary union. Setting that up, staffing it and making it operational. We believe that that should have started yesterday rather than tomorrow,” urged the head of government as she emphasized the importance of St. Maarten being prepared to assume this type of responsibility.

With regard to a currency for St. Maarten, the Prime Minister said “it is the preference of government to go for dollarization”. Her cabinet will soon take this recommendation to the Parliament of St. Maarten and hold public forums on its effects. While no specific period was identified for this process, the Prime Minister stressed “dollarization is beneficial to St. Maarten.”