Bank president Robert van Trikt with on his left Director Banking Operations, Maikel Soekhnandan. On his right is Director of Monetary and Economic Affairs William Orie and General Secretary Faranaaz Hausil.

Introduction of Central Bank President Robert van Trikt held during the press conference on Tuesday, March 19, 2019 

Ladies and gentlemen of the press, 

To get straight to the point about the purpose of this meeting with you, I want to state that this is not necessarily a press conference in the traditional sense where you receive information from us and you transfer it to society.                                                                            Our intention is to share with you a development that has been initiated by the Central Bank to set the course for the Republic of Suriname to a financial and economic position that should protect us from risks and at the same time bring about production and therefore progress.

I want to talk to you today about the current national economic developments, monetary policy and its coordination with fiscal policy and thereby indicate what positive prospects we have as a nation, despite the challenges we face. One of these challenges is the exchange rate on which pressure is currently being exerted. I will also inform you of my policy intentions regarding the financing of the state by the Bank. 

I will dwell a little longer on Suriname getting through the National Risk Assessment which is currently the biggest challenge. Responsibility for this assessment lies primarily with the Central Bank. First, as a monetary authority, we must institutionally strengthen ourselves to cope with this immense task.Communication about this process with everyone in the society is of the utmost importance. With everyone I mean anyone who gets hold of SRD 1.00 every day and spends it again because of the forthcoming developments which are so far-reaching.

The Centrale Bank van Suriname faces enormous challenges but with the commitment of management and the rest of the employees, I feel enormously strengthened and take on this challenge with complete confidence.

It goes without saying that communication with the government, the Government, in particular the Ministry of Finance, will be intensive. There will be continuous close coordination between the monetary authorities regarding financial and monetary policy. The policy will be aimed at stimulating the development of Suriname namely production and investment and in particular economic development. Of course, there will also be extensive communication with stakeholders, so that they can coordinate their policies in a timely manner. 

National economic development

There are signs of improvement for the Surinamese economy, whereas growth prospects are favorable. This growth will mainly be driven by the mining sector. However, there is still room to stimulate growth in other sectors and furthermore diversify our economy. The IMF has projected economic growth between 2.1 % and 2.5% for Suriname for the next three years. (acknowledgment)

Furthermore, low inflation is projected for medium term, which will be favorable for the development of purchasing power. An average annual inflation of 6.5% is projected for 2019 which is based on stable exchange rates. However, public finances remain an area where good balance will be necessary for macroeconomic stability in the medium term. Regular consultation between the Centrale Bank van Suriname and the Ministry of Finance is also a crucial condition for achieving this stability. The money coverage of around 65 percent can be considered stable. The legal requirement is at least 50 percent. The international reserves are good for import coverage of 3.2 months. If imports from large mining companies are excluded - because they do not rely on national foreign exchange reserves - this coverage increases to around 5 months. 

However, I do not see these positive developments reflected in the stability of the exchange rates.

Exchange rate 

For some time, there has been pressure on exchange rates, especially on the US dollar. The problem concerning the import of cash US dollars due to the detention of the Euro funds by the Netherlands in 2018 is felt in the shortage of cash US dollars. Due to the dollarization of certain sectors, such as gold, fishing and timber, exporters wish to withdraw cash US dollars from local banks to make payments. Because cash US dollars have not been imported for nearly a year, cash dollars are therefore not sufficiently available. Exporters can still freely make cashless payments.Due to the long absence of sufficient US dollars, sentiments have been transferred to other segments of the foreign exchange market. I have had intensive consultations with both banks and cambios. Based on this, proposals have been worked out and are being implemented step by step.

Some measures taken in this context, in close consultation with the Bankers' Association are: 

  • Abolition of transaction costs on cash deposits and withdrawals in Surinamese currency at banks. The CBvS has also eliminated the costs of its payment system to banks.
  • The deposit of foreign currency at banks with underlying documents to certify the origin has been raised from USD 3000 and EURO 3000 to USD 5000 and EURO 5000.
  • Urgently called on banks to minimize transaction costs for cash deposits in euros.

 

Monetary policy 

Monetary policy will be aimed at actively influencing banks' liquidities in order to achieve a healthy ratio between liquidity growth and production growth and to achieve a manageable inflation level. We will further substantiate the reserve money targeting regime. In addition to the cash reserve scheme, other instruments will also be used to influence bank liquidity. The focus on bank liquidity will be an important way to keep the exchange rate stable. A Monetary Policy Coordination Committee will be established to take informed and timely decisions in the area of ​​liquidity management in the financial system. An important requirement for the effectiveness of monetary policy is a well-functioning interbank market which the Bank will give the necessary attention. I also think that the development of the secondary market for treasury paper is essential for the public to have an alternative investment instrument and for the State to be able to finance any deficits on more favorable terms.

Monetary and Fiscal Policy Coordination 

Monetary and fiscal policy coordination is essential, especially in a small economy, to achieve macroeconomic objectives. The Central Bank can also better fulfill its role as State banker and cashier in such coordination. An electronic connection will be established with the Public Financial Information System so that the Bank can perform this task more efficiently. Together with the Ministry of Finance, we will set up the necessary mechanisms to achieve sustainable coordination of policies between the two monetary authorities in favor of the country. Policy coordination does not in any way mean that the monetary policy of the Central Bank is determined by the Minister of Finance or the fiscal policy by the Governor of the Central Bank. Both authorities maintain their policy autonomy. The advantage of policy coordination is that both authorities can make better coordinated policy decisions.

Financing of the State by the CBvS 

With regard to the financing of the State, I guarantee that I will never act above the legally permitted 10 percent standard. In my view, the development of domestic financial markets is urgently required so that the State can finance part of its budget deficit in a responsible manner.

National Risk Assessment

The Central Bank is a member of the National Anti Money Laundering Commission (NAMLAC) which will prepare the evaluation under the leadership of the Steering Council (Finance, JUSPOL and CBvS). The CBvS has the leading role in this. The National Risk Assessment is part of that preparation. Suriname needs to map and document the risks it runs for money laundering and terrorism financing and to strengthen its legal and institutional framework so that the country cannot be abused. At the request of the Minister of Finance, the IDB is prepared to support us in carrying out the risk assessment. The IDB has already gained experience with this extensive project in various countries.An important result of the risk assessment is a national action plan containing the measures that must be taken to eliminate the identified shortcomings. It is of the utmost importance that Suriname carries out a good risk assessment and eliminates the shortcomings with diligence. A number of countries have already been tested in the region and the results cannot be called good. Doing business and carrying out financial transactions are becoming increasingly difficult and expensive for private individuals, businesses and the government. It affects imports, exports and remittances and which sooner or later has an effect on the economy of the country as a whole.

De-risking is the process in which foreign banks, the correspondents, discontinue relations with local banks, the respondents. These relationships have sometimes existed for decades, but out of fear of the high fines that can run into the hundreds of millions, the correspondents choose to end the relations which is done with a simple email, without the possibility of discussion or defense. De-risking is a serious problem for the entire Caribbean region. There is a persistent perception that the region is a risk, but that is not supported by the high profile cases in which American banks are given millions of fines for money laundering. The region is not involved in these cases. The discussion with mainly the US authorities and correspondent banks is conducted at the level of the heads of state and the Central Bank governors, but unfortunately has not yet led to solutions. In the meantime, Suriname will have to demonstrate that it is taking concrete steps to combat money laundering and terrorism financing. We will have to think about how we handle our payment transactions at home and abroad. The whole world looks at us and at the region.

Together with the Bank, NAMLAC will handle information to the public in general and stakeholders in particular. We will organize sessions with the press to deliberate on the issue and would like the press as a partner in this exercise that is so crucial for Suriname.It is of great importance that we as a country go through the National Risk Assessment (NRA) successfully, since Suriname will already be evaluated by the CFATF in 2020. Suriname risks isolation if the evaluation is not done successfully which is an enormous consequence, in particular for the financial system.Fine tuning and modernization of financial laws and regulations is therefore necessary, for example, the amendment of the Banking Act, the introduction of an Electronic Payments Act, the completion of the Insurance Supervision Act and the Credit Registration Office Act. The Bank also focuses on setting up a Compliance department with FIBA ​​(Florida International Banking Association?) And Certified Asset Management Professional (CAMP), with the young professionals at the Bank playing a pioneering role. The Central Bank will take the Corporate Social Responsibility (CSR) concept even more into account in its policy of being a leading financial institution.Suriname is currently in a "10 seconds to disaster" situation, an unenviable position, with regard to international regulation of the financial management of our country. It requires a joint effort of every citizen, every actor within Surinamese society to change. The Central Bank is at the forefront of this, but will also assist in any other position where necessary. Based on the total of changes and new systems that need to be introduced, it is not feasible under normal circumstances to achieve this before November 2020. However, the Central Bank officials have now committed themselves to the challenge of this job for Suriname.

The relationship with existing international organizations will be deepened and new partnerships will be entered into. This is to involve our employees and our society as a whole into the changing world. The Bank wants to play a pioneering role in this, because waiting means that we as a financial society cannot meet the demands of the global community and even more so the financial community. Our attention will continue to focus on the inclusiveness of every citizen in the financial system, through financial education and the implementation of projects with financial and non-financial stakeholders, the Bank will strive to make citizens aware that we all have an obligation to watch over our money and how to handle it.In 2019 Suriname will have to realize that we have to abandon our cash culture and choose to pay per bank transfer therefor the money flows will be administered more efficiently and accountability will be easier. The Bank has taken a first step in 2015 with the Suriname National Electronic Payment System (SNEPS) and since then the banks can exchange transactions with each other at an accelerated pace. The banks can now carry out the daily clearing independently in the system which formerly was done through the Central Bank. The commercial banks have already taken steps years before to make the switch to cashless money possible namely: Point of Sale (debit card), credit cards, internet banking, online payment. The awareness among Surinamese with regard to the risks that cash entails is growing, but it is far from being what it needs to be, so information regarding these issues must be provided.

Communication 

To communicate with all those who have an interest in receiving its information, the Central Bank will use all existing communication channels more effectively, supplemented by new initiatives. For example, departments such as the Library and the Numismatic Museum will from now on play a proactive role in the Bank's communication policy, aimed at raising society's awareness of Suriname's financial system, the value of its own currency and the role and meaning of the Bank, nationally and internationally.The Bank will present itself as an institution that is more than 100% committed to the national interest and will do so by communicating sufficiently and effectively, nationally and internationally. All existing communication methods will be used for this, we use the concept of "all inclusion communication".The principle "say what you do and do what you say" will be guiding for the Bank.Of course, I cannot talk about the Central Bank's communication with various target groups, without mentioning you, the media, as a target group. Based on the national interest that must be served, we see you as a partner in this. We will need each other to serve the Surinamese interest. We want to inform the Surinamese society about what it needs to know and you naturally want that information as well, that is why I ask you to see the Central Bank as your partner too. All previously mentioned communication channels are also available to you. As soon as I took office, I invited all the stakeholders which are important to the Bank and exchanged ideas with these actors in order to come to an agreement for the various economic challenges facing the Bank. The support of all these actors, namely the Bankers' Association, the Cambiohouders Association, the insurance companies (SURVAM), the money transfer offices, the savings and credit cooperatives, the pension funds, the foreign exchange commission, has been promised to me, which is very good for this enormous challenge.

International development 

It is known that Suriname has a small open economy that is highly dependent and sensitive to the international economic situation, in particular to the economic situation on the market for raw materials and mineral products. It means that Suriname cannot influence these developments in any way, but must have the resilience to cope with developments that can sometimes have disruptive consequences for the national economy. From this point of view, external economic developments must always be taken into account in Surinamese policy circles. To strengthen the resilience of the economy, it is important that Suriname diversifies its production structure and builds strong institutions. It is advisable to make maximum use of the opportunities offered by international organizations, friendly countries and institutions in the field of technical assistance.

The AML / CFT framework of Suriname will be evaluated for the 4th time in 2020 by the Caribbean Financial Action Taskforce. Through this evaluation, countries in the region assess each other for compliance with the 40 Recommendations of the Financial Action Task Force. These recommendations include a wide range of focus areas. Not only the functioning of the financial sector is examined, but the entire chain that plays a role in preventing and combating money laundering and terrorism financing. This may include the Public Prosecution Service and the police, but also the MOT, the Tax Authorities, customs, accountants, notaries and many other stakeholders. The Bank will therefore devote more attention in the coming period to the compliance of the various institutions working in the financial sector, systems and procedures will be tested against the recommendations, legal provisions and guidelines of the Bank. Where necessary, solutions in consultation with the institutions involved or the sector representation. The public has already noticed some of the changes, in the sense of other and higher requirements when conducting bank transactions. Not out of interference or to make life difficult for someone else, but to meet the requirements of doing business in the year 2019.

Exchange RatesAugust 26th and until further notice

Currency Buying Selling
USD 7,396 7,520
EUR 8,159 8,331
GBP 8,984 9,209
ANG 4,112 4,228
AWG 4,112 4,228
BRL 1,777 1,840
TTD 1,077 1,111
BBD 3,667 3,760
XCD 2,712 2,783
PER 100 GYD 3,482 3,599

Gold CertificatesAugust 26th and until further notice

Coupon SRD
5 gram 3.640,62
10 gram 7.281,25
50 gram 36.406,24
100 gram 72.812,49
500 gram 364.062,44
1000 gram 728.124,87
Gold LME: USD 1.505,80 / tr.oz

Inflation

  Average End-of-period
2012 5.0 4.3
2013 1.9 0.6
2014 3.4 3.9
2015 6.9 25.1
2016 55.5 52.4
2017 22.0  9.2 
2018 6.8  5.4 
     
2019 Month-to-month Year-to-year
Jan 0.7 5.5
Feb -0.1 4.3
Mar 0.0 4.2
Apr 0.6 4.6
May 0.4  
Jun* 0.4  

*) Preliminary figures 

 

Exchange RatesAugust 26th until further notice

Currency Buying Selling
USD 7,396 7,520
EUR 8,159 8,331
GBP 8,984 9,209
ANG 4,112 4,228
AWG 4,112 4,228
BRL 1,777 1,840
TTD 1,077 1,111
BBD 3,667 3,760
XCD 2,712 2,783
PER 100 GYD 3,482 3,599
CNY 1,028 1,061

Gold CertificatesAugust 26th until further notice

Coupon SRD
5 gram 3.640,62
10 gram 7.281,25
50 gram 36.406,24
100 gram 72.812,49
500 gram 364.062,44
1000 gram 728.124,87
Gold LME: USD 1.505,80 / tr.oz

Inflation

  Average End-of-period
2012 5.0 4.3
2013 1.9 0.6
2014 3.4 3.9
2015 6.9 25.1
2016 55.5 52.4
2017 22.0  9.2 
2018 6.8  5.4 
     
2019 Month-to-month Year-to-year
Jan 0.7 5.5
Feb -0.1 4.3
Mar 0.0 4.2
Apr 0.6 4.6
May 0.4  
Jun* 0.4  

*) Preliminary figures 

 

Balance sheet