The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Central Bank’s governor yesterday reassured “there is no material impact to The Bahamas’ financial sector” from Russia’s decision to name this nation among “unfriendly” countries opposed to its invasion of Ukraine.

John Rolle issued the short statement to Tribune Business in response to Russia’s July 24 decision to include The Bahamas among jurisdictions with whom it will only settle financial obligations, or debts, in its own rouble currency rather than US dollars.

In reply, the Central Bank of The Bahamas said the move by Vladimir Putin and the Kremlin - said to have been made in retaliation for this nation banning financial transactions with Moscow’s ministry of finance and own central bank - would have virtually no impact because less than 1 percent of deposits in the banking system are exposed to Russia.

While Russia’s actions will impact credit and other claims due from that nation to individuals and entities in The Bahamas, the effect is far from material. “Outcomes of this nature were expected,” the Central Bank said.

“The Central Bank of The Bahamas does not anticipate any material impact of the measures on Bahamas-based banks and trust companies. The level of direct exposures to Russian entities remains below thresholds that would destabilise the operations of any affected Bahamian financial institution.

“Based on the Central Bank’s recent survey, Russian exposures held in The Bahamas equated to around 1 percent of the system’s total deposits and about the same fraction of custodial assets. In the meantime, the Central Bank of The Bahamas reminds supervised financial institutions that the directives issued by the Bahamas group of financial services regulators on 12 March, 2022, remain in force.”

The Ministry of Foreign Affairs, in a statement yesterday, added that “the impact is more symbolic than real” from Russia’s actions. It added: “We have committed no unfriendly acts against Russia in the objective sense of that word.”

The Central Bank said back then that international banks and trust companies based in The Bahamas had about $420m in deposits, and $2.5bn in custody or trust assets, for whom the ultimate beneficial owners were from or connected to Russia. That information was correct up to February 28.

“The greatest proportion of Russian exposure would be linked to the international sector. However, the Central Bank is currently canvassing domestic financial institutions - that is the commercial banks, money transmission business and electronic money service providers - to ascertain any level of exposure within those sectors,” it added. “The information disclosed today are aggregates for the international banking and trust sector, and not specific to any sanctioned interests.”