4
Business View CARIBBEAN
and Tobago maintained an accommodative monetary
policy stance, in an attempt at boosting economic ac-
tivity. While there has been a small pick-up in core in-
flation in the early months of 2014, Headline inflation
has remained under 5 percent. During the nine-month
period October 2013 to June 2014, the bank kept its
main policy rate, the Repo rate, unchanged at 2.75
percent, while utilizing a number of liquidity manage-
ment instruments in an attempt to contain the high
liquidity levels. In response, commercial banks main-
tained both their basic prime lending rates and the
interest rate on term loans at 7.5 percent in an effort
to encourage borrowing. The weighted average deposit
rate was also held constant at a subdued 0.2 percent
over the period.
As business lending recovered lending to the private
sector by the consolidated financial system rose by
5.8 percent on a year-on-year basis to March 2014, up
from 3.2 percent in September 2013 and 2.4 percent
one year earlier. Commercial banks’ lending to the pri-
vate sector expanded by 6.0 percent in March 2014
