for Sint Maarten for the April–June period of 2013 were not available. Consequently, only the development in government revenues could be analyzed. The available data indicate that revenues increased by 1% during the second quarter of 2013 compared to the second quarter of 2012, driven by a growth in turnover tax, income from business licenses, and profit tax. By contrast, revenues from excises on gasoline and nontax revenues dropped. In the external sector, the current account of the balance of payments for the monetary union recorded a lower deficit in the second quarter of 2013 than in the second quarter of 2012, reflected by a rise in exports of goods and services combined with a decline in imports. By contrast, both the income and current transfers balances deteriorated. Exports rose due mainly to more foreign exchange earnings from bunkering activities and transportation services. Moreover, the collected refining fee increased reflecting, among other things, more production activities at the Isla refinery in Curaçao. Export growth was partially offset, however, by a decline in re-exports by the free-zone companies in Curaçao reflecting lower foreign demand, notably from Venezuela. The decline in imports was caused mainly by lower merchandise imports, particularly by the free-zone companies in Curaçao. The current account deficit was financed primarily by the transfer of funds by foreign companies to their local bank accounts and net trade credits received on imports. Furthermore, net direct investments into the monetary union increased due largely to increased claims of foreign direct investors on their subsidiaries in Curaçao and Sint Maarten. By contrast, net portfolio investments abroad increased, largely because institutional investors purchased more foreign securities. Because the financing from abroad exceeded the current account deficit, the balance of payments recorded a surplus in the second quarter of 2013 reflected by an increase in the gross international reserves of the central bank. The money supply contracted in the second quarter of 2013 due to a decline in net foreign assets. The latter decline was mainly the result of a drop in the market value of the gold reserves of the central bank. In contrast, net domestic assets expanded, attributable to the net withdrawal of deposits from the banking system by the governments of both Curaçao and Sint Maarten. Furthermore, miscellaneous balance sheet items rose because of the revaluation of the gold reserves. The increase in net domestic assets was mitigated, however, by a decline in net credit extension to the private sector. The latter decline was the result of a drop in loans extended in both Curaçao and Sint Maarten. During the second quarter of 2013, the Bank continued to direct its monetary policy to the tightening of the surplus in the money market, given the high deficit on the current account of the balance of payments and the declining trend in the international reserves. Consequently, the reserve requirement percentage was raised by 0.50 percentage point to 16.00%. Also, the Bank continued with the credit measure to bring the growth in private credit extension more in line with nominal economic growth. The other monetary policy instrument of the Bank, the auctioning of Certificates of Deposit (CDs) was deployed in a neutral way, aimed only at the refinancing of maturing CDs. However, to increase the attractiveness of the CD auctions, the Bank also offered maturities longer than the regular 1-month and 3-month terms.
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