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Caribbean Islands-Finance and Banking

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Caribbean Islands Index

St. Kitts and Nevis had a relatively simple system of public and private financial institutions in the 1980s. As a member of the Organisation of Eastern Caribbean States (OECS--see Glossary), it had as its central monetary authority the Eastern Caribbean Central Bank (ECCB), headquartered in Basseterre. St. Kitts and Nevis also used the Eastern Caribbean dollar as its medium of economic exchange; it was pegged to the United States dollar at a rate of EC$2.70 to US$1.00 in 1987.

The two islands had six financial institutions in 1986, including both foreign and domestic concerns. Barclays Bank, the Royal Bank of Canada, and the Bank of Nova Scotia represented foreign interests, whereas domestic institutions included the St. Kitts and Nevis National Bank, the Development Bank of St. Kitts and Nevis, and the Nevis Co-operative Bank. Financial assistance was also provided by multilateral institutions, such as the CDB and the World Bank (see Glossary).

By the mid-1980s, savings levels had been deteriorating steadily since 1978. By 1981 they had become negative, forcing foreign savings to become the base for lending to both the public and the private sectors. Public sector borrowing increased in the 1980s because of the deteriorating fiscal situation caused in part by the fall in sugar tax revenues. Additionally, the private sector was saving less and purchasing more, particularly consumer durables.

Data as of November 1987

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