 Honorable Prime Minister of St. Lucia, Phillip J. Pierre, Governor of the ECCB, Mr. Timothy N. J. Antoine, members of the media, invited guests, all those in social media land, welcome to the press conference, which will be facilitated by myself, Monde Lois, Press Secretary to the Prime Minister of St. Lucia. So we'll move right into our first session, and Prime Minister Hon. Phillip J. Pierre will address you. Thank you, Monde. I will read a communique of the 102nd meeting of the Monetary Council of the Eastern Caribbean Central Bank, and that was issued today after our council meeting. The 102nd meeting of the Monetary Council of the Eastern Caribbean Central Bank was held at the Golden Grove Ballroom Harbour Club, Hotel Gross in St. Lucia, on the 22nd of July, 2022, under the chairmanship of Hon. Phillip J. Pierre, Prime Minister and Minister for Finance for St. Lucia. Council received a governor's report on monetary credit and financial conditions in the Eastern Caribbean currency union for the period January to June, 2022. The report focused on the ongoing economic recovery, both globally and within the ECCU, as well as the impact that the war in Ukraine and associated economic sanctions are having on the recovery. It indicated that, one, global economic recovery, which took hold in 2021, has slowed in 2022, with economic growth estimated at 3.6% for this year. Economic sanctions on Russia coupled with Ukraine's role as both a major agricultural producer and manufacturer of key inputs into the automobile industry have led to higher levels of inflation globally. The war in Ukraine and associated economic sanctions have resulted in increased prices for fuel and other commodities such as wheat. As a consequence, member countries of the Eastern Caribbean currency union have taken several policy actions, including subsidizing fuel prices resulting in a loss of revenue in an effort to limit the impact of rising costs on citizens and residents. These actions come as ECCU member countries recover slowly from the pandemic and amid the continuation of some policy interventions they introduced to help mitigate the COVID-19 pandemic. Overall, monetary conditions in the ECCU remain accommodative. Monetary and credit conditions improved during the first half of 2022 with growth in private sector credit being positive. The ECCU stock of international reserves expanded to a level 12.1% higher than the pre-pandemic levels in February 2020. At the end of June 2022, the total foreign exchange reserves of the ECCB amounted to 5.3 billion. From the period March 2020 to June 2022 the average monthly foreign reserves back in ratio was 96.4%. To put this in context, the starting requirement is 60%. So we are at 96.4% and the normal requirement is 60%. Having considered the state of monetary financial and credit conditions in the ECCU the monetary council decided to, one, maintain the minimum savings deposit rate at 2%. Two, maintain the central bank's discount rate at 2% for short-term credits and 3.5% for long-term credits. The minimum savings rate, the MSR, is the lowest rate that commercial banks can offer on savings deposits. The central bank's discount rate is the rate at which the ECCB lends to governments and commercial banks. The monetary council was advised of the following developments in the financial sector. One, the banking system remains stable with overall credit extension to the private sector exhibiting resilience throughout the pandemic. Two, the banking system maintained its high degree of liquidity and capital buffers remained at robust levels. Three, the non-performing loans ratio increased marginally to 11.8%. This is well above the 5% regulatory minimum requirement. Four, council was appraised that activity on the regional government securities market, the RGSM, showed notable improvement during the first half of the year, January to June 2022. New investment flows into the market increased by 23.4% or EC 102.3 million when compared to the corresponding period January to June 2021. This is a welcome sign as the market continues to recover from the effects of the COVID-19 pandemic. Council was also appraised that the number and amounts of moratorial on loans have continued their steady decline. This is an important signal from the banking sector likely reflecting improving confidence. As at March 2022, the end date of the ECCB regulatory waivers for the COVID-19 loan program, commercial banks had 1.150 loans on moratoria with total outstanding balance, 741.1 million representing 5.4% of total loans. This compared favorable to about 40% in September 2020 with a value of 5.2 billion. The COVID-19 loan repayment deferral program created a necessary space for financial institutions and borrowers to restructure loan facilities without incurring defaults. Council was informed that the recovery is spreading, albeit slowly, throughout various sectors of the ECCU economy. Cruise ship arrivals and stayover levels have increased relative to the end of December 2021. And ECCU member countries have opened with minimum restrictions for travelers. Cruise arrivals rose 6,000 feet in 6,011 at the end of March 2022 and expected to continue increasing in 2022 as COVID-19 protocols continue to ease. The recovery in tourism is hampered by ongoing challenges with air connectivity in the region. The construction sector also continues to recover bolstered by capital investment by member governments. Economic activity in 2022 is being adversely impacted by higher levels of inflation due to the war in Ukraine and associated economic sanctions, higher energy prices, supply chain disruptions and low air transport connectivity. For example, stayover arrivals from the Caribbean, which averaged 20% of total stayover arrivals in 2019, averaged only 6.5% in March 2022. The lower level of arrivals from the Caribbean is indicative of the air connectivity challenge within the ECCU. Council received the report on the status of implementation of the program of action for recovery, resilience and transformation. Parts of the ECCU economies. At the 97th meeting of the Monetary Council held on 24 October 2020, the council approved part. The program focuses on key policy actions considered fundamental for the recovery, resilience and transformation of the ECCU economies in the wake of the COVID-19 pandemic, which caused the deepest economic contraction on record. Part encompasses four broad pillars, namely financial stability, resilience and inclusive growth, fiscal and debt sustainability and payments modernization and digital transformation. The Monetary Council approved the draft payment system and services bill 2022. Once the bill is enacted by ECCU member countries, it would facilitate a payment system that is safe, efficient, resilient and competitive. Council agreed that the PSSA is needed to support an environment where innovative payment service providers may leverage technology to expand the range of payment services. The payment system in the ECCU stands to benefit from an increased role by non-banks in the payment system facilitated by a forward-looking and predictable legal and regulatory environment. And the PSSA is required to align the legal and regulatory framework for the payment system in the ECCU with the International Organization of Securities Commission's Principles for Financial Market Infrastructure, PFMI. Council received a report from the Cork Committee on Insurance, which is charged with advancing efforts to bring resolution for ECCU policy holders of the failed insurance companies, British American Insurance and Clico Life Insurance. British American Insurance Resolution. The Monetary Council agreed to deliberate on the way forward to resolve our standing matters, including the claim by the government of Barbados on the pension assets and the funding arrangement with Sajiko. Clico, International Insurance, CIL. The Monetary Council ratified the run Robin Decision Approval of the Trust arrangement regarding the bond approval of Barbados to the 7 million from the government of Barbados. Reports on the operations of the Eastern Caribbean Asset Management Corporation, ECAMC. The Monetary Council considered the reports of the ECAMC's management accounts as at May 41, 2022. Council noted that the ECAMC had unbordered assets from all four approved financial institutions. The cooperation is actively managing the assets required to date, holding discussions with debtors. Report from the Eastern Caribbean Partial Credit Insurance Guarantee Corporation, ACPCGC. Council received an update on the status of the operations of the ECPCGC. The cooperation continued its engagements towards admitting credit unions and development banks to the ECPCGC. Council also noted the plans by the cooperation to host training for loans officers from August 2022 and to hire technical assistance professionals to provide support to MSMEs before the approval of the guarantees. Further, Council strongly endorsed the ECPCGC's plans to undertake targeted promotions in every member country to bring greater awareness to the ECPCGC and encourage greater uptake of the guarantees. Established by the Monetary Council with strong financial and technical support from the World Bank, the ECPCGC officially launched in October 2020 and is integral to building out a modern credit ecosystem in the ECPCU. Participation. Council members attending the meeting. Whoa. Honorable Philip J.P., Prime Minister and Minister for Finance, St. Lucia, Chairman. Honorable Wayne Girard, Alternative Council Member from St. Lucia. Honorable Dr. Ellie Sirenza-Webster, Premier and Minister for Finance for Anguilla. Honorable Gaston Brown, Prime Minister and Minister of Finance, Antigua and Barbuda. Honorable Deacon Mitchell, Prime Minister and Minister for Finance, Greenator. Honorable Joseph Eastern Farrell, Premier and Minister of Finance, Montstrac and the Honorable Camilio Gonzalez, Minister for Finance, St. Vincent and the Grenadines. Here ends the communique. Thank you, Prime Minister. So we will now open the floor for any questions. Any questions? I have some questions, but they're not from me. And if you have any questions, you have to come to the mic. So I will start off the questioning. These are from my media colleagues. How might the ECCB approach credit union regulation in the region? Press and drops. Thank you, Chairman. So director, let me begin by thanking for excellent fellowship of our 100 second meeting of the Wanderer Council. I think when I address the OECS credit union movement some years ago in St. Lucia, I think I described them as a force for good in our region. Having regard for the work they've done, their contribution, quite key to me to the development of our region. I think we also have to appreciate the changing landscape of our financial system. So while, yes, the Canadian banks have left our leaving and our indigenous banks are stepping up to take on more responsibility, it is also true, equally true, that in a sense the credit unions are doing what our indigenous banks did. So they have also stepped up their own role. Having recognized that, the Eastern Caribbean Central Bank has been working with the credit unions in recent years. I believe it was in 2018 or 2019 we signed an MOU, Eastern Caribbean Central Bank, with the triple CU, the Caribbean, Confederation of Credit Unions to collaborate on a number of areas. That includes, for example, the payment system, the cash, there's a currency, credit bureau and some other areas. And so I'm pleased to note, for example, that right now we have in our member countries the legislative, I guess I know already, for us to change our rules to allow credit unions to have access to our automated clearing house. There's that big development. I'm also pleased to note that St. Lucia has already passed, gazetted this particular change of rules. I'm saying all this to say that there is clearly a strong and growing relationship between the Central Bank and the credit unions. Having said that, I think the credit unions and ourselves recognize too much is given, much is expected, much is required. And so I want to associate with the chairman's comments in his opening statement this morning when he strongly supported the credit union and also made a call for an expectation that there will be higher levels of governance and higher levels of accountability as they make a bigger contribution to our region. And so I want to conclude my response by saying that that will change because the credit unions are asking the Central Bank to do more with us. The credit unions are interested in the clearing system. The credit unions are interested in the credit bureau, which we are going to launch later this year. They've said they want to be part of that early. The credit unions are interested in access to credit to the Central Bank. Now, to access credit, you have to be regulated by the Central Bank. That is a discussion, obviously, that will need to take place. There are no decisions at this point in time. But the credit unions also are interested in deposit insurance. So as they are interested in these offerings by the ECB, we have to work on what is an appropriate arrangement for the credit union, while recognizing that the credit union have very special contributions to development. But we cannot ignore the fact that we have to ensure adequate financial stability for them. So I think the dialogue is ongoing and the ECB stands ready to continue on that path. Thank you, government. Another question for the government and also the prime minister, the public, especially in Senucia, have complained about the onerous task in the whole thing. How did the government of Senucia or ECB intend to ameliorate this issue? But the banks are on the constant pressure for the corresponding banking and any error can cause them to lose it. And if they lose that, that means their entire payment system is in complete disarray. And further, most of the banks now in the region, particularly in Senucia, they are locally owned. So they have no one to go to. So any problems, they are the ones who have to face it. But having said so, I think we really have to look into the fact that a young person who wants to open an account may not have two pieces of ID. So we have to look into it. But I think the banks are trying to protect themselves, possibly a little overprotective. But there is a discussion that we have to have with the banks on why must a young person just start it have to have two or even three pieces of ID to open an account. I don't know if the government wants to add anything. Go ahead, Praveen Sanjay, man. I think you're right. I mean, you're right. A lot of the pressures are coming up. Even for our central bank, frankly, it's one in the National Committee. Financial Action Task Force, and the CFETA, where they have to report on the money running and terrorist financing efforts. And we all know, let's be blunt, that most of the money running in the world takes place in the advanced economies. That is fact. But as I say it goes, when you're poor or when you're small, you're exposed. Meaning that, as the Prime Minister said, we have to take extra care. And so that is exactly what the advancements have been doing. We are looking for ways to try to see how we can make this a little easier. For opening, but also maintaining accounts. So on the maintaining accounts where every X number of years you have to bring back in this and bring back in that, we are looking to see what we can adjust on the legislation to make that a little less hassle for people who have accounts existing. But for the people who are opening new accounts, I don't have an easy answer because the Prime Minister told you the truth. It is really international impositions. What we continue to look forward with. Because the irony is, it is far easier to open up an account in the United States than it is in the Caribbean. That is not good for doing business in the region. He spoke to young people, entrepreneurs, trying to open up a business account or personal account, not being able to do that. That is what's in our economies. So he raised it with me. Yesterday when I arrived, we had a meeting, the Prime Minister raised it very still with me. And we are going to look to see that anything else we can do, but I want to manage expectations. Because as he said, much of these are really international impositions and we have to be so careful because most of our bank assets are in indigenous hands. And so we have to be mindful of that reality as well. Thank you very much. And my final question, this morning we heard about the strong backing of the EC dollar to the United States dollar. The minimum requirement is 60 and ours is at over 90. Why the need for such a strong backing way above the required level? I think the answer in terms of money, but I think it's because of stability, in this stability has been so for over 40 years and it's a credit. It's a credit to us as a set of small islands to be able to have our currency that is so highly valued. I think that that all as well, there is stability in exchange rate, there is stability in trading. And I believe that it is credit to our institutions, credit to the management of the bank from the start to now that we happen to be able to keep it even in terms of pandemic, after all kind of economic problems and economic issues, the prime mortgage crisis, we could keep our back in our regions. I think it's true to us and we should continue to maintain that level of stability. And if at any time we lose our stability or sustainability, we may end up being a problem. I think this is the government probably explaining. Prime minister, before you move, isn't that a bit onerous on? Can you remember states to have such a high backing? Above the 60 percent? It's not onerous, I think, we have to have a level of discipline. And there's a body of thought that says it's too high, but I think we should look at where we've come from, where we are. We are small islands in very small countries, small islands. And for a small island to be able to maintain it, even in terms of prices, is cute us. But if ocean ready comes to shove, and these are one of these, that decision can only be made by the monetary council alone and everyone must agree. Right? So it's a serious decision to make to change it. But I think that we should try our best to maintain that level of stability and credibility for our country and for our people. Thank you, prime minister. Is that enough? Yes, thank you, prime minister. You're absolutely right. It is a credit to all small states and a little history is useful in a proper perspective. When we embark on independence in the 1970s, 80s, we were not expected to survive as small states. We go back and read some of these reports. We were seen as bassist cases that could not survive. But we wanted independence, we get independence. This mechanism demonstrates that when small states come together, for common cause, we can create arrangements that work for us that are durable and resilient. That is important. Because a lot of technical development is about our own self-confidence, who we are, our own identity. Are we able to handle our business? This is an example where we are handling our business. But let me also say that the way we think about the high reserves is really as an insurance policy. And everybody knows with an insurance policy you pay a premium. But you pay a premium for peace of mind, for peace of mind. Not to worry that in the event that you have a disaster, a shock, a loss, you will be indemnified. In other words, you will be made poor. This is what this results means to our currency unit. Yeah, are we? Today we are all concerned about inflation. But let me tell you, if we had an unstable currency, you have not seen inflation. Because the evaluation of our currency would be even higher inflation. That's that effected in what that means. In other words, we have avoided all of that. And through all this pandemic, walking in the hurricane and the furnace, I said, the dollar has remained strong. We have demonstrated that, yes, keeping the results that are cost to do with them, but it gives us insurance and resilience when we have shocks. Let me also say, because we consider this very carefully, we listen when people speak. Before the pandemic, we actually did some technical work which we shared with and brought to the Monetary Council. And the question was, could we use a limited portion of our reserves for growth and development? And essentially, the answer came back, we probably could use a limited portion, maybe about 10% of the reserves. And we even started discussing what we might need with that. Then the pandemic came. But the good news is that we were able to ride out the pandemic and we continue to do that because the reserves are there. So I do want to say to people, I hear you when you ask them about the question, but I put to you the historic perspective, the insurance policy, which is what it is, the resilience that we need as small states. And we believe that this has worked for all of us. With everything else that's going on in the world, the one thing we are not worried about right now is our exchange rate. That it is stable, it is strong, and it has demonstrated that it can stand the test of time. Thank you, Governor. And probably one last question. Since you brought it up in terms of using reserves for economic development. So this question is, Mr. Antoine Lawden, Mr. Antoine Lawden member states for their interventions to offset steep increases in petrol products. Sustaining these policy measures would prove challenging. Can the ECCB step in to provide concessionary funding to help member states make up for revenue loss? Minister of Finance, I'll be happy not to have people here. I will really be happy with the ECCB because I've been curing. And as I said this morning, sometimes I have to pay back. We're not only losing revenue, we have to pay back. So I mean, there's a negative. I'll give you something. I'll take another example. On LBG gas, everything of gas that the public buys, the government pays $22 on every 20-pound cylinder of gas. $22, sometimes it's between $24 and $25. So we would love to get some return. But I just want to tell you that these subsidies are taxing. They are causing tremendous strain on the revenues of our island. All the islands. We do not know how long they will last. We have no idea how long it lasts. But why is it doing that? The other services of government must continue. Civil servants must continue to get paid. The hospitals must continue to run. And the other government services will continue. What I can tell you is for now, we are holding a strain. And for now, we are trying to keep the prices at the... How long it lasts? I can't tell. And another consideration for Senusia is our voucher rate is 12.5%. That's our voucher rate. And in terms of Senusia, I'm going to speak for Senusia, VAT on many food items is either zero rated or VAT exempt. So we are at a further disadvantage in Senusia. And further, we have no VAT on electricity. We have no VAT on water. So our revenue is even more constrained than some other islands. This is no one's fault. It's our own deliberate fiscal policy to ease the cost of living on the most vulnerable. So our choices are very, very, very difficult. But we've chosen to continue to absolve the increases. For how long? Depends. But for the time being, we are absolving these increases. And I'll be very happy if somebody could help me. Thank you, Chairman. Again, I will tell you what the First Six Department series will be yesterday will be. What is Candice Angel Bandu? He was very direct. And I understand and I respect that because the truth is, as a former financial secretary, I understand the pressures of government and treasuries. I really do. It was only a first for a long time. And the governments are really trying. And the question is, what can the Central Bank do? Or can we help their assets? Unfortunately, no, we cannot. Here's why. If we attempted to essentially lend government money or even give it away, assuming we could, which legally we can't, so legally we cannot. But if we could lend, we have limits. We then know the limits we can. But beyond the limits, we cannot. And the reason for that is simply, back to the question, the previous question, the disability of the dollar. Once this Central Bank starts accessing the lending of the governments, you will see the backing begin to slide. You will see the backing ratio begin to fall. And it will destabilize our currency. And so that is why one of the reasons why we've been very successful for so long, this single dollar, 46 years since the PEC was introduced in 1976, July 6, I think it is, is because we've been very disciplined in terms of how we lend to member governments. And so while we are very sympathetic about the situation, we are constrained as a Central Bank in terms of what we can do. I will say, I was a little surprised when I discovered that there is no barter on electricity in solution. I was taken aback by that because there are very few countries that I certainly don't know if that is true or that is the case. So in the government's responding to this real challenge, the inflation shock as we called it, it really depends on your physical capacity. What can you do? Prime Minister has explained that for every 20-pound cylinder, he's given up. He's losing 22, sometimes $24. Now I understand how this thing is supposed to work. These are supposed to be areas of revenue for government to help hospital, education, police, roads and so on. They are sources of revenue. Right now, the government is not just not collecting revenue, zero. It is a minus. It is actually taking revenue from other places, power as it is, and putting to help give all the price of their cooking gas at $43. You see the challenge? You see the challenge? This is a real issue. And I think it's very important for somebody to understand the situation of what the government can and cannot do. And that is why I made a call this morning. In fact, the Prime Minister finished his speech and actually we both agreed. This is a time for coming together with social partners. This government, business, labor, civil society, churches, youth. We have to sit around the table. We have to put all the things on the table. The government is doing this. What is business doing? Private sector trade union is doing this. What is government? This is an important conversation and this is a time for patriotism and shared sacrifice. Yes, the government has to do what it can and it's trying, but it has to be other people have to be involved. That's the model that is going to work. You look at the United States, look at the challenge the US is having with deal with inflation, the great United States of America. They have elections in the early middle and even with that in front of them, there's only so much stimuli that they can do. So I think that discussion will help in terms of sharing the load in how we deal with what is really a global challenge and make no mistake. As the Prime Minister said this morning, people are hurting and we understand that. So again, my appeal would be for a discussion and a working together. That's why I call it price cultures. We are not in good conscience it is unconscionable in this period where people are suffering for operators to be price coaching to be exploiting a situation where people are hurting and that is one patriotic and we have to see so it is wrong. So let us continue to work on what is a difficult problem to find the best ways through this period until such time as inflation begins to rise. Thank you Governor and thank you Prime Minister and thank you Governor Timothy Antoine for joining us for this press conference to the members of the media and to all those in the public and on social media thank you for joining us at this press conference of the chairmanship of Prime Minister Hon Philip J.Pierre at the 102nd meeting of the ECCV Monetary Council. Have a good evening.