Suriname

The Central Bank of Suriname (CBvS) undertook significant steps to modernize its monetary policy framework by shifting from an exchange rate regime to a monetary targeting regime in 2021. The main objective was to stabilize inflation and manage liquidity effectively, especially after the Suriname dollar's sharp depreciation and high inflation. The CBvS faced challenges in managing excess reserves, leading to the introduction of tools like Central Bank Certificates (CBCs) in 2022 and the increase in reserve requirements in 2023. However, persistent issues like low engagement in auctions and high bid rates continued to complicate liquidity management. The mission supported the CBvS by introducing an advanced statistical framework for liquidity forecasting and by assessing challenges in the money market participation. The forecasting framework integrates 12 forecasting models, helping to enhance the accuracy of reserve money projections and improve operational efficiency. The mission also involved collaborative efforts through surveys and workshops with commercial banks to address their concerns and ensure better understanding and participation in the monetary policy framework. The recommendations include reviewing the use of CBCs, improving liquidity forecasting, and modernizing the banking infrastructure to better align with the CBvS' policy objectives and enhance the effectiveness of the monetary system.