MONETARY COUNCIL RESPONDS TO ECONOMIC CONTRACTION IN ECCU
Basseterre, November 05, 2001 Members of the Monetary Council of the ECCB are of the view that the events of September 11, 2001 have accelerated the decline of the economies of the Currency Union, which like those of most emerging markets, now face a crisis. These events are impacting the major sectors of the economy with tourism being particularly affected as evidenced by closure of some hotels, layoffs and reported cancellation of bookings for the upcoming season. In response, Council, at its last meeting in St Lucia, set out a number of measures to stabilise and stimulate the economies. Council reaffirmed the parity of the EC Dollar at its present rate of EC$2.70 to the US Dollar. To stimulate the economy, Council lowered the discount rate at which the ECCB lends to commercial banks from 8 to 7 per cent. To address the weakening fiscal situation, Council established a Commission on Tax Reform and Administration to review and make recommendations on governments
