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Caribbean Islands Finance and Banking
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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