EXCESS BANK LIQUIDITY AT $2.8BN BY END-JANUARY

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

BAHAMIAN commercial bank surplus liquidity almost hit the $2.8bn mark at end-January 2023 even though the decline in the industry’s deposit base outpaced the contraction in domestic credit, it was revealed yesterday.

Excess liquidity, which represents assets available for lending if banks can find suitable borrowers and risks, hit a new high as the industry struggled to find new opportunities. “Monetary developments for the month of January were marked by moderated build-up in banking sector liquidity, even though the reduction in the deposit base surpassed the decline in domestic credit,” the Central Bank of The Bahamas said in its January economic update.

“Specifically, excess reserves - a narrow measure of liquidity - grew by $14.1m to $1.942bn, a slowdown from the $48.3m expansion in the preceding year. Similarly, excess liquid assets - a broad measure of liquidity - increased by $26.4m to $2.799.2bn, exceeding the prior year’s gain of $8.5m.” The regulator added: “During the review month, external reserves reduced by $30m to $2.565bn, albeit lower than the previous year’s decline of $44.1m.

Contributing to this outturn, the Central Bank’s net purchases from commercial banks moderated to $7.1m from $48.2m in the preceding year.

“Further, commercial banks’ transactions with customers shifted to a net sale of $0.7m from a net intake of $73.7m a year earlier. Meanwhile, the Central Bank’s net sales to the public sector narrowed to $47.8m from $91.5m in 2022.” Elsewhere, foreign currency sales for current account transactions jumped by 21.2 percent to

Family Islands and will facilitate the construction of additional poultry houses.

“In phase two of the project we will see 15 grow houses in the south and central Bahamas, and phase three, we will construct 23 grow houses in the northern Bahamas. That’s 38 houses constructed in 12 Family islands, increasing egg production from 700,000 to 28m eggs per year,” Mr Sweeting added.

“A project of this magnitude will ensure that the eggs produced will completely reduce reliance on imports. And the Golden Yolk will have an immediate national economic impact, not just on food security but on growing the economy.”

The project aims to construct poultry houses built to withstand climate change and hurricanes, and also involves a new feed mill. A semi-automatic, smart poultry house is slated to be built at the Gladstone Road Agricultural Centre Mr Sweeting said: “The Golden yolk project will also initiate the construction of a farmer-smart poultry house here at the Gladstone Road Agricultural Centre that will be semi- automatic, energy efficient and easy to maintain.”

$674.1m, relative to January 2022.

“Leading this outturn, payments for ‘other’ current items - primarily credit and debit card transactions - grew by $74.4m. Further, outflows for non-oil imports rose by $33.1m, oil imports by $18.9m and travel-related transactions by $4.4m. In contrast, factor income remittances decreased by $12.5m and transfer payments by $0.5m,” the Central Bank said.

“Total Bahamian dollar credit contracted by $5m during the review month, a reversal from a $74.9m growth in 2022. Underpinning this development, net claims on the Government declined by $17.5m, a shift from an $81.9m expansion a year earlier.

“In contrast, private credit grew by $12.6m, a turnaround from a $5.9m reduction in the preceding year. Specifically, the increase in commercial credit extended to $23.4m from $9m in the prior year. Further, the contraction in consumer credit slowed to $6.9m from $23.4m a year earlier,” the regulator added.

Speaking at yesterday’s launch event, Prime Minister Philip Davis KC said: “The Golden Yolk project is historic because it represents one of the first steps in a marathon toward a more resilient, self-reliant Bahamas. The Golden Yolk project is an urgent and crucial undertaking, one that promises to move the needle toward greater food security for our country.”

The project is projected to increase Bahamian egg production from about 700,000 per year to 28m via the 38 new poultry houses on the Family Islands and six on New Providence. Mr Davis said he expects the project to inject $2.3m into the Bahamian economy annually.

He added: “Poultry houses are slated for construction across 12 Family Islands with a further eight earmarked for New Providence. These sites will increase local egg production 30-fold, injecting an additional $2.3m into our domestic economy.” Golden Yolk is expected to create 90 jobs, half which will be based in the Family Islands.

“In addition to setting our nation on the path towards food sovereignty, the Golden Yolk project delivers on several commitments outlined in our ‘Blueprint