The financial system in Suriname remains broadly resilient, though inflation and exchange rate risks require close monitoring. The financial sector continues to demonstrate resilience but remains sensitive to inflation and exchange rate volatility. The banking sector, supported by its solid capital position, was able to absorb fluctuations in risk-weighted assets stemming from both appreciation and depreciation of the SRD. Non-life insurers were partially affected by inflation, but losses were offset through foreign currency investments and exchange rate gains. Life insurers performed steadily due to their long-term investment horizon. Pension funds and credit unions remain vulnerable to inflation and exchange rate risks.
Geopolitical tensions pose a significant downside risk to global growth and international market stability. Conflicts in the Middle East and Ukraine, as well as uncertainty surrounding U.S. trade policy, continue to elevate downside risks to global growth and inflation. Global growth projections for 2025 have been revised downward twice, while inflation expectations have been adjusted upward. These risks could result in higher international commodity prices, slower global growth, and elevated global inflation, potentially triggering revaluations of financial assets.
Suriname’s economic growth remains moderate and vulnerable to risks. The economy grew by 1.7 percent in 2024, driven by the non-mining sector and higher public spending, while lower gold production constrained economic growth. Declining inflation bolstered private consumption, and the financial sector remained stable, supported by stronger capital positions, improved profitability, and increased lending. Lower economic growth is expected in 2025, mainly due to a further decline in gold production. However, the latter represents a significant downside risk, as it could constrain economic growth and particularly negatively affect activity in the non-mining sector.
Public finances remain vulnerable, with ongoing fiscal and debt challenges. Government finances continued to face challenges, characterized by heavy reliance on tax revenues and higher spending on wages, subsidies, and recapitalizations, including a capital injection into the Central Bank of Suriname (CBvS). The fiscal and debt outlook deteriorated due to rising public debt and external debt repayments, despite successful debt restructuring agreements with commercial and bilateral creditors. These restructurings lowered the debt burden and strengthened the macroeconomic position. Suriname’s creditworthiness improved according to international rating agencies, but further progress requires structural reforms, strengthened debt management, and fiscal discipline.
Monetary policy remains proactive, focusing on price stability and control of interest cost. CBvS maintains a tightening stance through open market operations to control base money growth and curb inflation. Fluctuations in CBvS term deposit rates affect both bank profitability and CBvS interest costs. To contain high interest expenses and keep market rates at sustainable levels, maximum rates were introduced for regular term deposit instruments as of June 18, 2025.
The financial sector remained broadly stable in 2024. Banks recorded profits and improved asset quality. However, the aggregated liquidity ratio remained below the internal norm, and correspondent banking relationships were under pressure. Credit unions experienced declining profitability and solvency, though liquidity remained adequate. In the insurance sector, assets increased due to rising valuations of equities and investments, while persistent inflation affected the technical result. The life insurance sector showed positive growth in terms of profitability. Pension funds achieved solid returns and maintained stable coverage ratios.
Stress tests confirm overall resilience in the financial system but highlight liquidity and concentration risks. Banking sector stress test results indicate robustness to solvency shocks, but vulnerabilities persist in liquidity and concentration. Non-life insurance stress tests reveal potential liquidity pressures under scenarios of higher claims. Pension fund stress tests demonstrate their ability to absorb shocks without significant coverage ratio deterioration.
Increased financial interconnectedness heightens concentration risk and contagion potential. Financial interconnectedness is closely monitored under prudential supervision. In the first quarter of 2025, interconnectedness among financial institutions increased, with a high concentration of term deposits and equity holdings between banks and insurers. Pension funds’ exposure to banks increased, while linkages between credit unions and banks declined. This growing network of exposures raises systemic risk and concentration risk.
Cyber and climate-related risks are rising and require targeted monitoring and mitigation. Suriname has experienced only small-scale cyber incidents, including a May 2024 attack on the government’s website and fraud and phishing cases at commercial banks. Banks continue to work with law enforcement authorities to combat financial crime. Climate risks including heavy rainfall, flooding, and sea-level rise pose a material threat to financial stability, although Suriname has so far been spared from hurricanes. CBvS will play a coordinating role in integrating climate risk into supervision and in developing a climate stress-testing framework for the financial sector.
Payment systems continue to support financial stability and market confidence. By ensuring smooth and secure transaction settlement, mitigating counterparty and systemic risks, and reinforcing market trust, the payments system remains a cornerstone of financial stability. Both the Real Time Gross Settlement (RTGS) system and the Automated Clearing House (ACH) recorded a clear increase in transaction volumes.
Enhanced data and analytics strengthen insights into the real estate market and financial sector risks. During the second Residential Property Price Index (RPPI) workshop, the CBvS and its partners worked with a more comprehensive dataset for 2019–2022 provided by the Management Institute for Land Registration and Land Information System (MI-GLIS), complementing the web-scraped data used in the previous workshop. Multiple analytical methods and models were applied to create a robust and representative house price index.
Financial Stability Report 2025
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