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Finance Minister Calls for International Loans to Be Issued in Local Currency
Antigua and Barbuda’s Finance Minister is calling on international financial institutions and donor countries to provide future funding in domestic currency to help Small Island Developing States (SIDS) avoid massive losses caused by currency risk.
Speaking in a video statement, the Minister explained that SIDS have lost an estimated US $10 billion over recent decades due to borrowing in foreign currencies, which exposes countries to volatility and depreciation.
“What we found, having done some research, is that SIDS during the last few decades have actually lost about 10 billion US dollars combined from currency risk,” he said.
“When they lend you in different currencies outside of your domestic currency and there’s any depreciation, it increases the cost of borrowings.”
He pointed to Antigua and Barbuda’s past experience borrowing in Italian lira—before the introduction of the euro—as a cautionary example. The appreciation of the lira significantly increased the country’s debt burden, with the total ballooning to nearly half a billion dollars due to currency fluctuations.
To avoid similar situations in the future, the Minister urged lenders to either issue funding in local currency or offer reasonably priced hedging instruments. However, he noted that existing hedge mechanisms are often too costly and counterproductive.
He also advocated for more concessional lending terms, including long maturity periods of 25 to 30 years and interest rates closer to 1% or 2%, similar to those offered to lower-income countries.
“In the case of Antigua and Barbuda, if we were to borrow from the World Bank, for example, we’d be borrowing over a 10-year period at about 4%, which is still relatively expensive,” he said.
“We’re being penalised for our success, simply because of our high per capita income.”
The Minister highlighted the broader issue of climate justice, arguing that wealth indicators should not disqualify climate-vulnerable nations like Antigua and Barbuda from access to affordable financing when natural disasters strike.
“There must be some window to assist us, rather than telling us that we’re too wealthy,” he said.
The statement adds to the country’s ongoing call for fairer and more responsive international financial systems that recognise the specific vulnerabilities of SIDS in a changing climate.
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Gaston you have a credible investor willing to lend the country $375 million US to be delivered in ECD from CUB but you fail to respond or accept the offer. You rather go to your criminal enterprise and see how much you can hide in your offshore accounts. Do the right thing and accept the help before the deal expires!
PM check the BRICS bank, you’ll get a much better deal
in US Bonds last year or the year before?
SHOCKING!
He needs to resign… Just unacceptable.
Wait? 1 to 2 % Interest Rates in 20 to 30 years Loan? and 4 % Interests Rates in 10 Years Loan?
WTF bro, our bank charges over 6 % in 20 years and over loans, and 10% for 10 years loans, and 13 % and over for 3 years and over loans. We must accept this ridiculous rates that make us too slow in term of growing internally. That’s why Antiguans have difficult to borrow money for upgrade our little business or expand them. Too high mortgages rates, is nearly impossible for thousand of people borrow money for houses and start business.
Is our banks, our people work over there, our people control policies, our people are the leader of the country and our people is killing us with high loans rates. So our people are stopping us to grow.
When the PM talks finance and economics he leaves 95% of the population behind. And from the 5% maybe half gets it. PM you are far ahead your time. I hope the few can keep up with you and may this suggestion of you find roots. It will help the poorer countries big time. Finding foreign exchange to pay of loan is on of the biggest hurdles given the ever changing exchange rates. Making the payoff amount higher each time.