Inflows of foreign direct investment associated with tourism related construction activity were primarily responsible for the strong growth observed in deposits, stated a communique issued by the St. Kitts-based institution following the 57th Meeting of the Monetary Council.

This contributed to an above average rate of growth of 11.3% in the broad money supply, comprising currency held by the public and private sector deposits.

The Council said that more favourable lending terms and conditions from commercial banks as well as the upsurge in construction activity in preparation for Cricket World Cup (CWC) 2007 and other tourism related activity were reflected in an increase of 16.4% in domestic credit.

“With regard to monetary and credit conditions, it was noted that the demand for credit by both the private and public sectors is expected to remain robust, though growth should slow as projects related to the CWC near completion. Council observed that liquidity was still at a high level and is expected to remain adequate to meet the credit needs for maintaining the growth momentum,” said the communique.

The Council noted that the monetary and credit conditions were favourable for sustaining the economic expansion and maintaining exchange rate stability, and agreed to maintain the Central Bank’s minimum rate of interest on savings deposits at 3.0% and the Central Bank’s discount rate at 6.5%.

The Council also agreed to recommend that member governments take a step towards achieving uniform financial legislation throughout the ECCU, by adopting the framework setting out a consultative process among major stakeholders.

The ECCB Council is comprised of the Ministers of Finance from Anguilla, Antigua and Barbuda, Dominica, Grenada, Montserrat, St. Kitts and Nevis, St. Lucia and St. Vincent and the Grenadines.