The Central Bank of the Bahamas published the Governor’s Monthly Economic and Financial Developments remarks for December 2024, reporting that economic activity expanded in 2024 at a moderated pace while monetary conditions loosened as bank liquidity rose and external reserves increased modestly. For 2025, the Bank expects continued growth but potentially at a slower rate, and indicated it will support stronger private-sector lending even if this corresponds with a decline in external reserves, alongside actions aimed at absorbing excess liquidity. External reserves rose by around BSD 270 million to BSD 2.62 billion in 2024 and were estimated at BSD 2.63 billion at the beginning of February 2025; reserves are projected to contract overall in 2025 as banks expand private-sector credit and meet a larger share of government borrowing in local currency. In the banking system, private-sector credit increased by almost BSD 350 million (about 6.0%) in 2024 versus about BSD 60 million (1.0%) in 2023, while the non-performing loans rate fell to 5.5% from 6.7%. Foreign exchange market activity remained subdued, with commercial banks’ purchases from the private sector up 2.3% to BSD 7.3 billion and sales up 1.5% to around BSD 7.2 billion. To help withdraw liquidity, the Central Bank said it will accommodate faster repatriation of excess capital or dividends from the banking system, consistent with medium-term plans paused during the pandemic. It also flagged further work to ease access to credit for productive business activities where exchange controls still have an impact, and said efforts in the first half of 2025 will focus on completing implementation of the moveable collateral assets registry in consultation with lenders and the Attorney General’s Office.

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