Controller of Exchange

How can we tell if external (foreign currency) reserves are 'too low'?

Given the structural character of the economy-- a small, open, services-based economy-- there is a high reliance on imports for consumption and capital development. The administration of exchange control ensures that the economy is able to meet its foreign exchange demands, through the disciplined use of the country's foreign currency reserves.

Upon establishment, the Central Bank was given a statutory mandate to ensure that external reserves are maintained at 50% of the value of total notes and coins in circulation and demand liabilities of the Bank; and for the most part, external reserves have been maintained comfortably above this statutory minimum.

Another indicator of foreign currency reserve capacity is the import cover, measured in weeks, which compares the level of external reserves to the value of imports of merchandise goods (excluding oil and including freight and insurance) over the corresponding period. By international convention, this ratio should fall no lower than 12 weeks.

  1. Are Bahamians permitted to open foreign currency accounts?
  2. Are Bahamians permitted to invest in financial securities abroad?
  3. What should I do if I wish to send funds to someone attending school outside of The Bahamas?
  4. As a non-resident am I permitted to enter into loan agreements denominated in Bahamian dollars?
  5. As a temporary resident in The Bahamas, would I be permitted to send funds to family etc. in my home country?
  6. Are there special provisions in respect of property transactions that involve non-residents?
  7. I am a Bahamian citizen who plans to take up residence outside of The Bahamas. Would foreign exchange restrictions still apply to me?
  8. How are external (foreign currency) reserves managed?
  9. How can we tell if external (foreign currency) reserves are 'too low'?
  10. How have external (foreign currency) reserves changed over the past few years?

Available FAQs