The Central Bank of The Bahamas (CBB) says the decision by Russia to include the country on a list of jurisdictions to settle obligations in Roubles will not have a significant impact on the financial market here.
In a statement examining the local banking sector to the financial measures announced by the Russian Federation, the CBB said that “this would impact credit and other claims due from Russia, to entities and individuals who are domiciled in The Bahamas”.
On Monday, the Russian Federation added the Caribbean Community (CARICOM) to the list of jurisdictions, against which Russian entities have been authorised to settle obligations in Roubles, for arrangements that were made in foreign currencies such as the United States dollar.
Russia has taken that position as it reacts to the embargo and other measures imposed by the United States and European countries in response to the ongoing Russia’s invasion of Ukraine that started in February.
“Outcomes of this nature were expected. 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 destabilize 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 one per cent of the system’s total deposits and about the same fraction of custodial assets,” the CBB said.
In the meantime, the CBB said it is reminding supervised financial institutions that the directives issued by the Bahamas Group of Financial Services Regulators on 12 March, this year, remain in force.
The CBB, in concert with other members of The Bahamas’ Group of Financial Services Regulators, issued directives to supervised financial institutions, prohibiting business activities with parties sanctioned by the United States and other identified western countries, in response to the war in Ukraine.
The Attorney General has also published directions for the financial services regulators to report information from supervised financial institutions, on any exposures to a list of parties named in sanctions.
