Schotte: Dollarization remains a political decisionPOSTED: 09/20/11 11:52 AM
WILLEMSTAD — Curacao’s Prime Minister has said that dollarization remains a political decision that Curacao and St. Maarten must take even though the International Monetary Fund has advised against it. Saying that the IMF is against dollarization is a stronger statement than the one put forward by Finance Minister Hiro Shigemoto, who’s said that the IMF would prefer St. Maarten work out certain issues first.
Schotte told media in Curacao that the IMF sees maintaining a joint central bank between St. Maarten and Curacao as a more economic option to dollarization, which will require separate Central Banks for the two countries.
In some specific remarks the IMF has given a negative review of the approval of the 80-20 law. The delegation believes that instead of restrictive measures like that the government should seek to create a more flexible labor market.
The delegation called the decision to raise the minimum reserve requirement for the commercial banks a responsible move even though the guilder is not yet in a danger zone.
“Exports are not going as fast as imports while spending exceeds income. If left unaddressed it can challenge the stability of the currency. The government must take measures to never get into a situation where the currency is discussed. There is currently no need to worry for the guilder, but spending must be tightened,” IMF delegation head Daniel Kanda said.