Government savings bond for small investors in preparation – Eye Witness News

NASSAU, BAHAMAS – The Central Bank is committed to working with the Ministry of Finance to establish a government savings bond program for small investors, according to Central Bank Governor John Rolle.

Speaking to the Bahamas Business Outlook yesterday, Rolle said increased savings would increase the resources available for business investment, infrastructure and growth.

“For small investors, the Central Bank is committed to working closely with the Ministry of Finance to set up a government savings bond program, to allow savers to gradually build up assets in public instruments, giving them access to the liquidity that these assets provide and to their competitiveness. returns prospects, ”Rolle said.

Governor of the Central Bank John Rolle. (PHOTO FILE)

“Over time, a savings bond framework should modestly increase the share of debt held by small retail investors, without causing the government to borrow more than it needs.”

He added, “Local capital markets will also need to continue to develop more collective investment opportunities for residents of the Bahamas. Infrastructure development is an area to be targeted – in public-private partnership frameworks, as is the growth of strictly private enterprises.

“Regarding the relaxation of exchange controls, the Central Bank will do more to increase the access of domestic enterprises to foreign currency financing, when the proposed projects have a positive impact on foreign exchange or they are in line with other national development priorities. “

According to Rolle, the outlets for international portfolio investment will also increase, complementing the improvement in domestic savings and could help encourage savings.

“For this, the Central Bank will remain focused on the gradual liberalization of exchange controls,” Rolle said.

“Our recent developments have encouraged the use of approved trust companies, with authorized agent status, as outlets for self-directed portfolio investments. However, gradual reforms will also be explored to promote increased use of BISX-listed certificates of deposit marketed by local brokerage firms that finance purchases of securities listed on foreign stock exchanges.

“Currently, access to foreign currency is suspended for both sets of activities, but this is only a temporary measure, which does not prevent residents from trading in accounts already open.”

He added: “Converting savings into investment also depends on greater access to trade credit. For this, it is vital to improve the security and transparency of national lending frameworks.

“The contribution of the Central Bank includes an ongoing role in the establishment of the credit bureau. The bureau’s credit information reports will help reduce uncertainties about the quality of potential borrowers, improving medium and long-term access to credit for businesses and individuals.

“The bureau, which was licensed in late 2019, is now setting up operations and is expected to start producing live credit report data by the start of Q2 2021. Commercial credit reports will begin to be generated. in a later operational phase. . “

Rolle noted that the next initiative, on which there is already collaboration with the Ministry of Finance, is to set up a collateral registry for commercial loans.

“This would establish security against a range of movable and even intangible property,” he said.

“The Central Bank will commission the board on the registry diagnostic study in the first quarter of this year. This will produce an overview of the legal reforms recommended to establish the registry; and a set of recommendations on the operational framework of the register.

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