Purpose

The system of reserve requirements in Suriname is imposed on commercial banks liabilities (1) in domestic currency and (2) in foreign currency. Reserve requirements on domestic currency liabilities were introduced on May 15, 2001, while that on foreign currency became effective as of February 12, 2003. The reserve requirements in domestic currency serve predominantly a monetary control function. They restrict commercial banks capacity to lend, and hence aggregate demand. Reserve requirements in foreign currency are intended to provide protection against liquidity/availability risk, and to enhance the stability of the Suriname dollar. The Surinamese economy is highly dollarized (deposit and credit dollarization of ±50% and 40%, respectively).

 

Technical issues

Reserve base

The reserve requirements are imposed on the deposit liabilities of the commercial banks, referred to as the reserve base. The reserve base comprises transferable deposits, savings deposits, time deposits and other funds that the public has entrusted to the banks. Public refers to non-bank financial corporations, non-financial corporations and households. The reserve base is calculated on a contemporaneous basis, implying that the exact amount of required reserves of the banks is not known until the end of the reserve maintenance period.

 

Holding of reserves

Reserve requirements must be maintained in the currency of denomination of the deposit liabilities; reserve requirements in US dollars and in euros are therefore payable in the respective currencies. Under the domestic currency reserve requirements the commercial banks are required to retain reserve balances with the Central Bank of Suriname (CBvS) in the form of non-interest-bearing deposits. Reserve requirements on foreign currency liabilities can be maintained in liquid deposits with correspondent banks abroad, which have a high credit rating. A part of the reserves can also be held in tradable/liquid bonds of high-rated issuers, provided that the CBvS gives prior approval to the bonds as eligible assets. A high rating refers to A rating of Standard and Poor's rating agency or an equivalent rating of a similar rating agency. Foreign currency required serves are thus fully remunerated.

 

Reserve ratio

The reserve ratio is uniform by bank and by type of deposit liability; i.e. the same rate applies to all banks, and to all types of deposit liability. However, the rate is differentiated by type of currency denomination. The reserve ratio for domestic liabilities stands at 35%, while the ratio for foreign currency liabilities is 50%. The following table summarizes the reserve ratios prevailing from 2001.

  

 

Maintenance period

The reserve maintenance period lasts one week (7 days). This period ends on Tuesday. Every Wednesday the required reserves are calculated based on the four weeks moving average of the reserve base. Averaging of reserve requirements during the maintenance period is not permitted.

 

Penalty

A commercial that fails to meet the reserve requirements in domestic currency, i.e. holds less deposits with the CBvS than required, is subject to financial penalty. The penalty includes interest payment over the period of the shortfall. The interest charges are calculated using the highest lending rate of the relevant bank plus two percentage points. In the event of a liquidity shortage, a bank has recourse to the credit facility of the CBvS (discount window). There are no financial penalties if a bank fails to hold sufficient reserve balances in foreign currency. However, moral suasion is used by the CBvS to ensure compliance.

 

Financing from reserves

Commercial banks are permitted to utilize a certain part of their required reserves to on-lend for private residential construction. This funding facility was created on February 12, 2004, by the CBvS in consultation with the commercial banks. The principal objective of this facility is to bring private residential construction at affordable interest rates within the reach of mid-income groups again and thus help alleviate the housing problem in Suriname. The mortgage loans are extended at a rate of 7% per annum up to a maximum of SRD 250,000 per applicant with a term to maturity of up to 25 years. The residence must be constructed for owner occupation and its maximum surface area may not exceed 150 m². Per banking institution, a maximum of 10% of the reserve base, as calculated at the end of each quarter, may be used for financing. 

(in millions of Suriname dollars)

  Jul.23,19 Jul.30,19 Aug.6,19 Aug.13,19 Aug.20,19 Aug.27,19 Sep.3,19 Sep.10,19 Sep.17,19 Sep.24,19 Oct.1,19 Oct 8.,19 Oct. 15,19
Reserve base                     6,492.1 6,535.8 6,591.8 6,655.1 6,711.9 6,773.6 6,809.8 6,838.9 6,843.9 6,804.3 6,805.4 6,817.2 6,842.1
Required reserves 2,244.4 2,259.7 2,279.2 2,301.2 2,321.0 2,342.3 2,354.9 2,365.1 2,366.9 2,353.3 2,359.3 2,363.3 2,371.9
minus: housing loans 459.7 459.9 460.1 460.7 460.7 462.1 462.9 462.9 464.1 465,5 465.5 465.5 467.3
Effective required reserves 1,629.1 1,644.2 1,648.5 1,670.0 1,689.8 1,709.7 1,724.0 1,734.1 1,749.7 1,734.7 1,743.2 1,747.2 1,754.0
Outstanding credit and investments
6,093.9 6,090.9 6,114.9 6,107.9 6,122.4 6,145.5 6,134.8 6,147.1 6,170.6 6,191.4 6,202.3 6,232.1 6,202.9
Money Supply (M1)1) 8,852.3 9,202.2 9,239.9 9,135.5 9,113.2 9,280.2 9,237.0 9,080.4 9,093.4 9,081.6 9,183.5 9,171.8 9,135.4
Broad Money (M2)2)(a) 19,225.1 19,573.5 19,678.8 19,588.4 19,515.4 19,757.7 19,713.0 19,576.1 19,579.3 19,584.7 19,680.2 19,591.6 19,554.3

Source: Statistics Department, Central Bank of Suriname          
1) M1 = currency outside depository corporations (SRD) + SRD and foreign currency transferable deposits.  
2) M2 = M1 + SRD and foreign currency time and savings deposits + gold certificates.

(a) Revised data fron July 30 - October 8, 2019.

 

 

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Click here for the historical required reserve for the Surinamese currency.

Click here for the historical required reserve for the foreign currency.

Exchange RatesOctober 22nd and until further notice

Currency Buying Selling
USD 7,396 7,520
EUR 8,239 8,412
GBP 9,549 9,788
ANG 4,112 4,228
AWG 4,112 4,228
BRL 1,762 1,824
TTD 1,076 1,111
BBD 3,667 3,760
XCD 2,712 2,783
PER 100 GYD 3,487 3,605

Gold CertificatesOctober 22nd and until further notice

Coupon SRD
5 gram 3.606,05
10 gram 7.212,10
50 gram 36.060,51
100 gram 72.121,02
500 gram 360.605,08
1000 gram 721.210,15
Gold LME: USD 1.491,50 /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  
Jul 0.2 4.3
Aug* 0.4 4.0

*) Preliminary figures 

 

Exchange RatesOctober 22nd until further notice

Currency Buying Selling
USD 7,396 7,520
EUR 8,239 8,412
GBP 9,549 9,788
ANG 4,112 4,228
AWG 4,112 4,228
BRL 1,762 1,824
TTD 1,076 1,111
BBD 3,667 3,760
XCD 2,712 2,783
PER 100 GYD 3,487 3,605
CNY 1,030 1,064

Gold CertificatesOctober 22nd until further notice

Coupon SRD
5 gram 3.606,05
10 gram 7.212,10
50 gram 36.060,51
100 gram 72.121,02
500 gram 360.605,08
1000 gram 721.210,15
Gold LME: USD 1.491,50 /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  
Jul 0.2 4.3
Aug* 0.4 4.0

*) Preliminary figures 

 

Balance sheet