News
June 3, 2011
Interest on public sector debt reduced

At the recently held launch of the Bank of St. Vincent and the Grenadines, the prime minister explained how he has reduced the interest on the public sector debt to the national bank.{{more}}

Speaking on Monday, May 30, Prime Minister Dr. Ralph Gonsalves said that he had borrowed EC$100 million from the Central Development Bank to reduce the

$160 million debt at BOSVG.

Under the CDB’s policy-based loan scheme, the loan will be repaid at an interest rate of 4.5 per cent – this, compared with the bank’s 9 per cent repayment rate.

“I haven’t increased the debt,” said Gonsalves.

“What I have done is to reduce the interest payments and make more liquidity available to lend the business community to life the economy of St Vincent and the Grenadines.”

Gonsalves added that the $42 million received from the sale of the bank’s majority shares has mostly been put towards the construction of the international airport.

He also revealed that he plans to sell another 29 per cent of shares; and expects to generate over $30 million from that to also invest in the international airport.

Of that 29 per cent, 20 per cent will be made available for purchase on the stock market by Vincentians and nationals within the currency union; five per cent will be sold to the National Insurance Scheme; and four per cent will be sold to bank employees.

Gonsalves reminded the public that despite this move forward, the country is “not out of the woods yet”, as international economic problems still have an impact on the Eastern Caribbean Currency Union.