April 17, 2023 –WILLEMSTAD – The Central Bank of Curaçao has announced that the import reserve of the island is almost five months at the beginning of April. This news comes as a relief to many, as it means that the import coverage has returned to the level that was last seen a few months ago. The standard for import coverage is three months, so this is good news for the island.
Import cover is calculated by the Bank as the ratio between the level of gross official reserves in a given month and the expected average monthly imports for the subsequent twelve-month period. This helps to ensure that food, medicine, fuel, and other necessary items can be paid for with the foreign exchange reserves at the Central Bank, and the guilder, which is linked to the dollar, keeps its value.
In absolute value, the import coverage amounts to 2,803 million guilders, which is equivalent to approximately 4.8 months of imports. Although this is not yet at the level before the COVID-19 pandemic, when the coverage was 5.2 months, it is still a positive sign. During the pandemic, the coverage even increased to 6.8 months because of liquidity support from the Netherlands.
After the initial increase in coverage during the pandemic, the import reserve of Curaçao decreased to 4.7 months. However, there has been a gradual increase since then. In February 2023, a slight increase to 2,619 million guilders was already reported, and in the first week of March, the reserve rose to 2,775 million. Now, it stands at 2,803 million guilders, which is a sign of continued growth.
This news is especially welcome given the ongoing challenges posed by the COVID-19 pandemic. The import reserve is an important indicator of the island’s economic stability and ability to weather unexpected shocks. While there is still work to be done to return to pre-pandemic levels, the fact that the reserve is increasing is a positive sign for the future of the island’s economy.