BANK VAN ARUBA CENTRALE. July Contents. Page. money. Published. October 8, No. 332

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1 C CENTRALE BANK VAN ARUBA MONTHLY BULLETIN July 2015 Contents I. Main economicc indicators II. Operations of the CBA Page 1 3 Statistical Annex 1. Monetary survey 2. Components of broad money 3. Causes of changes in broad money 4. Foreign assets 5. Consolidated balance sheet of the money creatingg institutions 6. Centrale Bank van Aruba: Summary account 7. Commercial banks' consolidated summary account 9. Government s position with the monetary system 10. Tourism 11. Growth in stay over tourism 12. Consumer price index Published October 8, 2015 No. 332

2 I. Main economic indicators Monetary developments In July 2015, money supply decreasedd by Afl. 8.1 million to Afl. 3,601.2 million, resulting from an Afl million contraction in net foreign assets 1 and an Afl million expansion in net domestic assets. Money, as a component of broad money, fell by Afl million to Afl. 1,879.8 million, as demandd deposits and currency in circulation registered decreases of Afl million and Afl. 0.6 million, respectively. The decline in demand deposits was the consequence of an Afl million reduction in deposits denominated in Aruban florin, which was largely offset by an Afl million upsurge in deposits denominated in foreign currency. Quasi money, on the other hand, grew by Afl. 4.3 million to Afl. 1,721.5 million, as time deposits denominated in Aruban florin recorded a growth of Afl. 9.4 million, which was partly mitigated by an Afl. 5.2 million decrease in savings depositss denominated in Aruban florin. Net sales of foreign exchange by the commercial banks to the public, mainly associated with net payments for goods, income, current transfers, as well as net transfers to notified foreign accounts of resident companies, contributed mostly to the decline in the net foreign assets. Thesee sales weree partly mitigated by net purchase of foreign exchange by the commercial banks from the public, related to tourism and other investment. An Afl million increase in domestic credit, partially counterbalanced by an Afl. 9.6 million decrease in non credit related balance sheet items, 1 Excluding revaluation differences of gold and foreign exchange holdings. led to the rise in the domestic component of the money supply. Domestic credit went up as a result of increases in claims of the banking sector on the private sector and net claims on the public sector of, respectively, Afl million and Afl million. The growth in the claims on the private sector was due to an expansion in loans to enterprises and housing mortgages of, respectively, Afl million and Afl. 4.2 million (Chart 1). In contrast, consumer credit declined by Afl. 0.7 million. The increase in net claims on the public sector was mainly due to an Afl million fall in government deposits. The contraction in non credit related balance sheet items was caused mainly by higher shareholders equity and clearing transactions. Chart 1: Nominal housing mortgages (in Afl. million) 1,100 1,050 1, Jan Feb Marr Apr May Jun Jul Aug Sep Oct Nov Dec Source: Centrale Bank van Aruba Inflation The consumer price index (CPI) for July 2015 noted a 0.9 percent increase, compared to July 2014 (Chart 2). The component Housing, registering a 1.4 percent hike,, was the largest contributor to this increase, as it moved from 0..1 percent in July 2014 to 1.4 percent in July The inflation acceleration was mostly a result of a rise in the sub category Electricity, gas and other fuels of the category housing, due to the raise in the energy tariffs in 1

3 October Excluding the effect of food and energy 2, the core CPI grew by 0.7 percent, compared to July 2014 (Table A). The 12 month averagee inflation rate remained unchanged at 1..0 percent in July 2015, compared to June 2015 (Chart 3). Chart 2: Inflation Aruba (in percent, end of period) Jan Feb MarAprMayJun Jul Aug Sep Oct NovDec Source: Central Bureau of Statistics Chart 3: Inflation Aruba (in percent, twelve month average) Jan Feb Mar AprMayJun Jul AugSepOctNov Dec Source: Central Bureau of Statistics Tablee A. Components of Inflation End month 12 month Inflation components inflation average inflation Jul 14 Jul 15 Jul 14 Jul 15 Food And Non Alcoholic Beverages Beverages And Tobacco Products Clothing & Footwear Housing Household Operation Health Transport Communication Recreation And Culture Education Restaurants And Hotels Miscellaneous Goods And Services Total Total Excluding Energy & Food Source: Central Bureau of Statistics and Centrale Bank van Aruba Tourism In July 2015, the number of stay over visitors totaled 109,251, which is 13.9 percent (+13,299 visitors) more thann in July 2014 (Chart 4). The expansion in both the Latin American market and the North American market of, respectively, 23.8 percent (+6,596 visitors) and 9.8 percent (+5,600 visitors) was responsible for this growth. The surge in the Latin American market resulted mainly from a 33.3 percent (+6,428 visitors) growth in the number of visitors from Venezuela. A 10.3 percent (+5,629 visitors) increase in arrivals from the United States was the main driver in the strengthening off the North American market. In the month under review, total number of nights spent in Aruba, as indicated by the visitors, grew by 9.0 percent to 747,038, compared to the same month of the previous year. The average intended night stays dropped slightly from 7.1 nights in July to 6.8 nights in July The number of cruise visitorss decreased by 13,688 or 36.7 percent to 23,627 in July 2015, compared to July 2 Partly affects the housing and transport components. 2

4 2014. The number of ship calls shrank 2015, down from 16 in July to 10 in July Chart 4: Absolute change in number of visitors by major markets (July 2015 vs. July 2014) Total 13,299 Rest of world Europe South America North America 6,596 5,600 5,000 10,000 15,000 Source: Aruba Tourism Authority II. Operations of the CBA On August 28, 2015, Afl. 45 million in three monthh treasury bills were issued at an averagee price of Afl per Afl. 100 nominal, yielding 0.69 percent on a yearly basis. On September 11, 2015, Afl. 20 million in three average price of Afl per Afl nominal, yielding 0.63 percent on a yearly month treasury bills were issued at an basis. 3

5 TABLE 1: MONETARY SURVEY* In Afl. million End of period May June July May June I. Net domestic assets 1, , , , , , , , ,231.2 A) Domestic credit 2, , , , , , , , , ) Net claims on public sector a) Gross claims** b) Government's deposits c) Development funds ) Claims on private sector a) Enterprises b) Individuals 1) Consumer credit 2) Housing mortgages c) Other 2, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , B) Other items, net II. Net foreign assets 1, , , , , , , , ,378.2 A) Centrale Bank van Aruba*** B) Commercial banks 1, , , , , , , , , III. Broad money 3,16 3, , , , , , , ,609.3 A) Money B) Quasi-money 1, , , , , , , , , , , , , , , , , ,717.2 * T he mon etary survey conso lidates th e accoun ts of the Centrale Bank van Aruba, the commercial banks an d th e Gov ernment related on ly to the issuance of components of the money supply, i.e., coin s and treasury bills. This survey sho ws the financial relation ship between the monetary sector, whose liabilities include the money supply, and oth er sectors of the econ omy. ** Gross claims include loans granted as well as government bond s in the han ds of the mon etary sectors and claims resulting from the issuance of treasury bills, cash certificates, and coins. *** Revaluation differen ces of gold an d official foreign exchange holdings are excluded in order to approximate the net import of foreign fu nds by the n onmonetary sectors. July 2, , , ,31 1, , , , , , ,

6 TABLE 2: COMPONENTS OF BROAD MONEY In Afl. million End of period Currency Issued At banks Outside banks Demand deposits Afl. Foreign currency Total Money Other deposits Treassury Quasimoney bills and (1) (2) 1-2) (4) (5) 4+5) 3+6) (8) (9) (10) (11) ) (13) 12+13) Savings Afl. Foreign currency Time Total Afl. Foreign currency cash loan certificates (3= (6= (7= (12= (14= Broad money (15= 7+14) , , , , , , , , , , , , , , , , , , , , , , , , January , , , , , ,339.8 February , , , , , ,434.8 March , , , , , ,366.9 April , , , , , ,429.1 May , , , , , ,371.8 June , , , , , ,386.7 July , , , , , ,364.9 August , , , , , ,316.7 September , , , , , ,317.4 October , , , , , ,398.4 November , , , , , ,416.4 December , , , , , , January , , , , , ,470.5 February , , , , , ,526.6 March , , , , , ,543.9 April , , , , , ,567.5 May , , , , , ,572.8 June , , , , , ,609.3 July , , , , , ,

7 TABLE 3: CAUSES OF CHANGES IN BROAD MONEY In Afl. million During period May June July May June July I. Net domestic money creation A) Domestic credit ) Net claims on public sector a) Recourse to monetary system b) Drawing down of bank balances 1) Government's deposits 2) Development funds ) Claims on private sector a) Enterprises b) Individuals 1) Consumer credit 2) Housing mortgages c) Other B) Other domestic factors II. Inflow of foreign funds* III. Broad money ) Money 2) Quasi-money * Revaluation differen ces o f gold and official foreign exchan ge holdings are exclu ded in order to approximate the net import of foreig n fund s b y the nonmonetary sectors. 6

8 TABLE 4: FOREIGN ASSETS In Afl. million Centrale Bank van Aruba Gold Other assets tion diffe- excl.( 9) Net rences* Liabilities Net Assets Liabilities Commercial banks Total Revalua- Total End of period (4= (7= (8= (10= (1) (2) (3) 1+2-3) (5) (6) 5-6) 4+7) (9) 8-9) , , , , , , , , , , , , , , January , , ,161.3 February , , ,162.5 March , , ,167.1 April , , ,165.8 May , , ,110.3 June , , ,092.0 July , , ,117.9 August , , ,052.5 September , , ,037.0 October , , , ,164.9 November , , , ,154.8 December , , , , January , , , ,266.3 February , , , ,289.8 March , , , ,261.5 April , , , ,308.1 May , , , ,330.1 June , , , ,378.2 July , , , ,342.2 * Of go ld an d official foreig n exchange h oldings, in accordan ce with the Central Bank O rd inance as revised in December

9 TABLE 5a: CONSOLIDATED BALANCE SHEET OF THE MONEY-CREATING INSTITUTIONS In Afl. million End of period May ASSETS 1. Claims on money-creating institutions a) Monetary authorities b) Commercial banks Claims on the public sector a) Short-term b) Long-term Claims on the private sector a) Enterprises b) Individuals 1) Consumer credit 2) Housing mortgages c) Capital market investments d) Other 2, , , , , , , , , , , , , , , , , , Foreign assets a) Gold b) Short-term c) Long-term 1, , , , , , , , Other domestic assets Total assets 5, , , , ,069.3 June , , , , , , ,095.1 July , , , , , , , May , , , , , , ,245.9 June 1, , , , , , , ,323.3 July 1, , ,31 1, , , , ,

10 TABLE 5b: CONSOLIDATED BALANCE SHEET OF THE MONEY-CREATING INSTITUTIONS (continued) In Afl. million End of period May June July LIABILITIES 7. Broad money a) Money b) Quasi-money 3,16 1, , , , , , , , , , , , , , , , , , , , Money-creating institutions a) Monetary authorities b) Commercial banks Public sector deposits a) Government b) Development funds Long-term liabilities a) Government b) Private sector 11. Subordinated debt Capital and reserves Foreign liabilities a) Short-term b) Long-term Revaluation differences* Other domestic liabilities Total liabilities 5, , , , , , ,095.3 * Of gold an d official fo reign exchange holdings May 3, , , ,245.9 June 3, , , , , ,323.3 July 3, , , , , ,

11 TABLE 6: CENTRALE BANK VAN ARUBA: SUMMARY ACCOUNT In Afl. million Domestic assets Foreign assets Total assets = Total liabilities Domestic liabilities Capital and reserves Government Develop- ment funds Reserve money Demand Time Total Other reserve money End of period (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) Notes deposits deposits Revaluation of gold and foreign exchange holdings Foreign liabilities (13) , , , , , , , , , January , , February , , , March , , April , , , May , , June , , July , , August , , September , , October , , , November , , , December , , January , , , February , , , March , , , April , , , May , , , June , , , July , , ,

12 TABLE 7: COMMERCIAL BANKS' CONSOLIDATED SUMMARY ACCOUNT In Afl. million End of period June 2015 Overall Resident Non- Resident July 2015 Overall Resident Non- Resident Assets 1) Cash ) Central Bank a) Current account b) Time deposits ) Due from banks a) Current account b) Time deposits ) One year and below ) Over one year 4) Loans 3, , , , a) Enterprises b) Individuals c) Mortgage 1, , , , d) Government 5) Securities a) Short-term securities b) Government bonds c) Other ) Sundry ) Fixed assets ) Total 5, , , , Liabilities 9) Current account 1, , , , a) Government b) Private sector 1, , , , ) Savings deposits 1, , ) Time deposits a) Development funds b) Private sector ) Due to banks ) Other liabilities ) Capital and reserves ) Total 5, , , , Supervisory ratios* Capital/risk-weighted assets ratio Loan/deposit ratio Liquidity ratio * Supervisory ratios cannot be derived from the consolidated balance sheet. 11

13 TABLE 9: GOVERNMENT'S POSITION WITH THE MONETARY SYSTEM Domestic deposits Gross Liabilities to Net Central Commercial liquidity Monetary Commercial Total liability Bank banks position authorities banks to the monetary Free Earmarked Development Total Demand Development system funds funds End of (4= (7= (10= (11= period (1) (2) (3) 1+2+3) (5) (6) 4+5+6) (8) (9) 8+9) 10-7) Change in net liability during period (12) January February March April May June July August September October November December January February March April May June July

14 TABLE 10: TOURISM Total Total Visitors by origin Diversification Average Average Cruise tourism visitor visitors Index 1) nights hotel nights North Of which Latin Of which Europe Of which Other stay occupancy Number of Ship America U.S.A. America Venezuela Nether- rate passengers calls lands Period (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14) ,685, , , , , ,838 80,874 40,068 32, , ,907, , , , , ,201 79,570 39,973 35, , ,126, , , , , ,020 77,010 37,788 34, , ,692,903 1,072, , , , ,593 80,155 36,995 32, n.a. 667, January 683,545 82,887 53,189 47,969 20,402 12,048 7,347 3,201 1, n.a. 97, February 629,063 78,979 53,271 47,946 16,327 10,452 6,773 3,367 2, n.a. 80, March 600,040 83,131 60,986 54,883 14,155 8,743 5,788 3,082 2, n.a. 80, April 576,273 84,079 51,937 49,077 23,420 16,705 5,137 2,773 3, n.a. 59, May 533,673 78,087 50,306 48,014 18,947 12,428 5,923 3,137 2, n.a. 34, June 573,091 82,708 51,418 49,343 23,016 15,786 5,974 2,715 2, n.a. 19,815 7 July 685,265 95,952 57,007 54,742 27,732 19,297 7,399 3,358 3, n.a. 37, August 713, ,048 50,724 48,232 40,907 32,506 7,967 2,918 2, n.a. 31, September 583,379 84,509 35,631 33,431 38,554 29,493 7,906 3,052 2, n.a. 25, October 618,664 92,649 44,769 42,509 37,888 30,009 6,725 3,220 3, n.a. 51, November 670,238 97,199 54,197 50,286 33,818 26,853 6,707 3,360 2, n.a. 67, December 826, ,854 57,132 50,368 43,304 35,273 6,509 2,812 2, n.a. 82, January 768, ,914 58,710 52,698 33,728 25,018 6,504 3,313 1, n.a. 77, February 664,780 89,991 56,582 50,737 25,852 18,779 5,454 2,762 2, n.a. 76, March 712, ,506 64,510 58,353 30,948 25,155 5,529 2,735 2, n.a. 61, April 665,687 99,604 60,360 56,888 28,582 22,203 5,307 2,849 5, n.a. 49, May 603,850 87,691 52,796 50,569 25,387 19,158 6,077 3,172 3, n.a. 26, June 594,440 87,447 52,933 51,256 25,335 19,032 6,110 2,449 3, n.a. 22,243 9 July 747, ,251 62,607 60,371 34,328 25,725 7,867 3,464 4, n.a. 23, ) The Diversification Index measures the concentration within the tourist market, and thus demonstrates the degree of diversification by tourist origin countries. The higher the index, the higher the level of concentration, meaning less diversification. For further reference on the methodology (which is an application of a Herfindahl-Hirschman index) see the Quarterly Bulletin (2011-I) of the CBA. Source: Aruba Tourism Authority/Central Bureau of Statistics/Aruba Hotel and Tourism Association/Cruise Tourism Authority. 13

15 TABLE 11: GROWTH IN STAY-OVER TOURISM Total Total North Of which Latin Of which Europe Of which Other visitor visitors America U.S.A. America Venezuela Nethernights lands Period (1) (2) (3) (4) (5) (6) (7) (8) (9) Monthly percentage changes 1) 2014 January February March April May June July August September October November December January February March April May June July Cumulative percentage changes 2) 2014 January February March April May June July August September October November December January February March April May June July ) As compared to a year earlier. 2) From the beginning of the year to the end of the indicated period as compared to the corresponding period of a year earlier. 14

16 TABLE 12: CONSUMER PRICE INDEX (December 2006 = 100) Percentage Change All Over Over Over Last 12 months groups previous 3 months a year over previous End of period index month earlier earlier 12 months January February March April May June July August September October November December January February March April May June July * As of January 2009, the basis September 2000 = 100 has been shifted to December 2006 =