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A mandate for modernisation

By EuroWeek Editor 1
15 Oct 2019

Suriname’s new central bank governor has had an immediate impact, ringing the changes and setting out his vision for 2030

Robert van Trikt took the reigns at the Centrale Bank van Suriname (CBvS) in March 2019, with far-reaching ambitions for the institution.

“Suriname is the 17th richest country in the world in natural resources,” van Trikt tells GlobalMarkets. “The central bank must ask itself what its role should be in ensuring the country fulfils its potential and is up to speed with international markets.

“I want to see Suriname lay down a vision for where it should be in 2030.”

International hot topics such as financial inclusion and financial technology immediately climbed the priority list. The bank moved to get up to speed in areas of monetary policy. The National Risk Assessment was launched to examine money laundering and terrorism financing risks ahead of Suriname’s mutual evaluation assessment by the Caribbean Financial Action Task Force in 2020. 

Meanwhile, the governor addressed urgent concerns such as excess liquidity in the banking system and the crippling lack of US dollar notes due to the seizure of euros by Dutch authorities back in April 2018 (see macroeconomic overview).

One executive in the private sector comments that the central bank has done “three years of work in six months”.

Maya Parbhoe, chief executive of OuroX, a fintech start-up, highlights the central bank has implemented “several measures” to improve the financial and monetary policy in recent months.

These include asking banks to transfer part of their required FX reserves, previously held abroad, to the central bank, setting up a market-based monetary policy framework directed at conducting open market operations, and amending financial legislation. 

“This should contribute to a more modern and sophisticated management of the economy,” says Parbhoe.

First of all, the bank had to put certain fundamentals straight. In his first press conference, van Trikt dismissed local speculation that he would help the government use additional central banking financing to boost pre-election support.

“With regard to the financing of the state, I guarantee that I will never act above the legally permitted 10% standard,” said van Trikt at the time. “The development of domestic financial markets is urgently required so that the state can finance part of its budget deficit in a responsible manner.”

As of August, Moody’s said that “a larger central bank balance sheet” was not its base case, highlighting it would be a credit-negative should that situation change.


When Suriname posted a 17% increase in government revenues in 2018, a curious point about the figure was that it was driven largely by a 33% increase in mining revenues.

Non-mining revenues increased by just 10%, which Moody’s highlighted was below nominal GDP growth and a slower pace than the 23% growth recorded in 2017.

This deceleration in non-mining revenue, Moody’s believes, points to “slowing economic activity”, and anecdotal evidence from the private sector backs this up.

“The operating environment remains difficult for the private sector in Suriname, and the government remains the main driver of economic activity,” says Steven MacAndrew, director of the Suriname Trade and Industry Association. “The SME community was badly hit by the economic downturn [that began in 2015], and small businesses suffered when the government had financial issues.” 

MacAndrew highlights the Association’s desire to see progress in sustainable development, fair competition, and the ICT sector, as well as continuing to advocate for a greater diversification of the economy — particularly in agriculture, tourism and manufacturing.

“Though the mining sector is a vital revenue earner for the government, we would like to see more focus on other sectors,” says MacAndrew. “Suriname has huge opportunities.”

As it looks to encourage this, the Association has made better dialogue with authorities a priority and MacAndrew notes that “it is a positive development that we have been able to hold several meetings with the new governor of the central bank since he took office”. 

These more frequent discussions speak to van Trikt’s vision for a broader role for CBvS. Authorities are well aware of the need to diversify the economy to reduce the vulnerability to commodity shocks, while the IMF has said that the lack of a non-mineral engine of growth “could further erode potential growth”, but finding this engine is not an automatic process.

The new governor believes the central bank can play what he sees as an “incubator” role as part of the task of “promoting the balanced socioeconomic development of Suriname”.

“The central bank cannot forget to be the adviser on how to best use all our resources and bring Suriname forward,” says van Trikt.

In part, this involves the central bank taking seriously its role as a “knowledge institute” to strengthen the institutional and financial capacity of the economy, and working to improve the productive cycle.

Yet perhaps the most ambitious part of the plan is for a new sovereign wealth fund — distinct from the already operating Savings and Stability Fund Suriname.

Separate to this intergenerational, rainy-day fund, the central bank envisages a further investment vehicle that will deploy assets for the benefit of government and society.

“This will be where we can deploy assets to increase production, exports, and growth, in the style of Norway, Belgium or the Emirates,” says van Trikt. 

Monetary moves

In recent months, the CBvS has modernised its monetary policy framework in conformity with recommendations from the International Monetary Fund. After visiting Suriname in October 2018, the IMF highlighted that the monetary framework “lacks standard instruments” and that the bank “does not have in place standing facilities that are common to most central banks”. 

After officially moving to a floating FX rate in May 2016, CBvS announced a monetary targeting regime, which will initially be used internally before switching to formally announcing operational targets to the public. 

It continued to smooth the exchange rate via interventions and manage liquidity through ad hoc instruments such as unwinding FX swaps and occasional deposit facilities to banks. 

Recognising the necessity for more indirect instruments to influence the amount of money in circulation under a floating FX regime, in July CBvS introduced deposit certificates and gold certificates, while in September it introduced its open market operations with an intraday liquidity facility, short-term liquidity facility, and deposit facility. These were facilities recommended by the IMF in its 2018 article IV report.

Of course, more sophisticated policies require improved visibility on the liquidity needs of the system, and the central bank has also worked to update its monetary monitoring and forecasting system.

Van Trikt credits Suriname’s decreasing inflation levels in part to these new tools for managing excess liquidity. As of September, he was confident that inflation would end 2019 at about 3.6% — compared to an initial estimate of 4.3%.

Tackling risks

If the list of measures implemented by the central bank is extensive, the new governor also wants to send a message about the way things will be done in Suriname.

Take the cash shipment of US dollars from the US Federal Reserve (see macroeconomic overview). Not only did this move address a severe imbalance in the country, but it also showed the standards at which Suriname could operate. 

“The on-boarding with the US Fed was an in-depth, tough process,” says van Trikt. “Passing this level of due diligence is worthy of international prestige.”

Completing the process is a promising sign for Suriname’s National Risk Assessment, for which the central bank received the full commitment of the government in van Trikt’s first month in office. 

A project management team including employees from the Ministry of Justice and Police, Ministry of Finance and CBvS was set up in May, and it was launched — with technical support from the Inter-American Development Bank — in July. 

Complying to anti-money laundering and terrorism finance standards is an urgent matter — especially in the Caribbean, where de-risking of correspondent banking relationships by foreign institutions is becoming a serious problem.

“We have not been affected by derisking to the extent that certain other Caribbean nations have been, but if we fail the mutual evaluation with the Caribbean Financial Action Task Force the consequences could be catastrophic,” says Steven MacAndrew, director of the Suriname Trade and Industry Association.

Conducting a National Risk Assessment will be “critical” in mitigating money laundering and terrorism financing risks and “effectively communicating the government’s efforts to foreign correspondent banks”, according to the IMF.

In an effort to increase standards, CBvS has also this year prioritised corporate and social responsibility, set up a compliance department, and held more than 50 meetings with players in the economy to discuss how and why they should help Suriname comply with the task force’s requirements.

Furthermore, CBvS is looking to ensure stability of the financial sector with a draft Bank Resolution Act and a contingency plan for systemic risk — both expected by the end of 2019. The National Risk Assessment also ties in closely with the central bank’s targets to improve financial inclusion and grow the cashless economy. 


With a market capitalisation of just 6% of GDP, the Suriname Stock Exchange remains small — despite a Capital Market Act passed in 2014 that aimed to set up a new exchange.

But private investors have taken an interest in the plans. In April this year, OuroX, a Suriname-headquartered fintech start-up in Latin America and the Caribbean, signed an agreement with the Association for Securities Trading in Suriname (VvES) for OuroX to operate the exchange.

Maya Parbhoe, CEO of OuroX, told GlobalMarkets that Suriname needs a “modern, transparent, digital capital market compliant to international standards”.

She feels there is an opportunity for at least 50 further companies large enough to be publicly traded in the next 18 months; today there are 11 companies and one Staatsolie bond listed on the exchange.

“Suriname has very high national savings to GDP and private credit to GDP ratios, which are perfect conditions for the creation and growth of a capital market,” says Parbhoe. “Suriname also has large pension funds that can only invest up to 20% abroad; it is vital to provide them with better investment options.”

The company also wants to create a modern government bond market that would allow commercial banks, pension funds and the general populace to participate.

“This would also give the central bank a more effective and liquid market to perform open market operations,” says Parbhoe. 

The central bank has set up an innovation hub to develop a fintech ecosystem, and Parbhoe believes conditions are ideal for Suriname to create a modern exchange.

“The silver lining of being so far behind when it comes to financial technology is that there is a lot of room for innovation,” she says. “We can effectively start with a blank slate and begin with the latest technologies.”

By EuroWeek Editor 1
15 Oct 2019