WILLEMSTAD/PHILIPSBURG--The Central Bank of Curaçao and St. Maarten (CBCS) will increase its pledging rate from two per cent to 2.50 per cent as of January 1, 2019.
This is the third increase since the historical low level of 1.00 per cent that
was effective since December 29, 2008. The previous increases took place on March 20, 2017, and March 27, 2018.
The United States (US) Federal Reserve raised the federal funds rate to between 2.25 and 2.50 per cent on December 19. This is the ninth increase since the historical low level of between 0.00 and 0.25 per cent effective from December 16, 2008, to December 16, 2015. Due the peg of the Netherlands Antilles guilder, the official currency of Curaçao and St. Maarten, to the US dollar, the interest rates in the international money market affect the interest rates in the money market of the monetary union of Curaçao and St Maarten.
An increase of the US federal funds rate affects immediately the international money market rates.
