Annual Report & Statement of Accounts, 2020
Published: Wednesday May 5th, 2021
The Central Bank of The Bahamas is pleased to announce the release of its 2020 Annual Report, which includes a summary of the Bank's operations over the year, an analysis of regulatory developments affecting the financial sector, a review of monetary policy, as well as payment systems developments. The Annual Report also provides an examination of the economic and financial environment, both internationally and in The Bahamas during 2020, and presents a comprehensive analysis of the Bank's Statement of Accounts for the year ending December 31, 2020.
The Report showed that, the domestic economy contracted sharply in 2020, with developments dominated by the spread of the Novel Coronavirus (COVID-19) and containment measures. Globally imposed travel restriction adversely impacted tourism output, with the high value-added stopover segment considerably reduced and the dominant sea category largely eliminated. As a result, employment conditions deteriorated sharply during the year, owing to widespread layoffs in the hotel and retail sectors. Nevertheless, the restart of foreign investment projects, and to a lesser extent ongoing hurricane reconstruction works, provided some support to the construction sector. Further, the fiscal deficit widened significantly in FY2019/20, underpinned by two major economic shocks, related to the passage of Hurricane Dorian and COVID-19, which contributed to a considerable falloff in revenue collections and an increase in spending, primarily for health and social welfare associated with the pandemic. These trends were further entrenched in the first half of FY2020/21, with the continued deterioration in the deficit, as the pandemic’s effect became more pervasive. In the financial sector, both bank liquidity and external reserves grew in 2020, as the decrease in domestic credit outweighed the reduction in the deposit base.
Buoyed by the notable rise in foreign reserves indicators, due largely to the Government’s external borrowings, the Central Bank's Monetary Policy Committee maintained its accommodative policy stance in 2020.
With regard to other major developments, the Bank continued to follow a risk-based approach to financial supervision, ensuring that the system remained stable amidst the shock of the pandemic. Further, in 2020, credit unions were enrolled in the Deposit Insurance Scheme. The Bahamas was also removed from the Financial Action Task Force’s (FATF) list of Jurisdictions under enhanced monitoring. In addition, the Central Bank commenced a gradual national roll out of the Sand Dollar digital currency through six approved authorized financial institutions. In terms of the credit bureau, the official kick-off of CRIF Information Services Bahamas Limited (CRIF Bahamas) was launched in January 2020. Other notable milestones included the successful demonetization of the one cent coin and commence redemption of the coins from circulation.
A comprehensive breakdown of the Statement of Accounts for the year 2020, revealed that the Bank recorded a modest decrease in total comprehensive income, as the decline in revenue overshadowed the reduction in expenses.
For full text reading, please download the attached document.
