In line with the Monetary Policy Committee’s (MPC) task to evaluate, determine, and provide transparency on the monetary policy actions of the Central Bank of Aruba (CBA), the CBA communicates the following. During its meeting of January 29, 2024, the MPC decided to maintain the reserve requirement at 22.0 percent as of February 1, 2024. Accordingly, commercial banks must hold a minimum balance at the CBA equal to 22.0 percent of their clients’ liquid deposits. The decision to maintain the reserve requirement rate was based primarily on the official reserves getting closer to the lower bound of the ARA metric, even though both the official and international reserves are still adequate and are foreseen to remain so during 2024. Furthermore, excess liquidity held at the commercial banks has been on an upward trend in recent months. Finally, maintaining the reserve requirement at its current level is considered prudent, given the continued uptick in loans and its potential effect on the international reserves. The CBA continues to monitor reserves and the excess liquidity developments, and stands ready to adjust the reserve requirement rate, if deemed necessary.

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