WILLEMSTAD – The Central Bank of Curaçao and Sint Maarten (CBCS) has reported a solid performance in its 2024 investment review, highlighting a strategic shift in reserve management that led to notable gains, especially following a surge in gold prices. According to the CBCS, total assets reached Cg 5.6 billion by the end of 2024—an increase of Cg 0.4 billion from the previous year.
The rise was primarily driven by a significant appreciation in gold, which gained 27.22% in 2024—its best performance since 2010—along with steady returns from actively managed foreign reserve portfolios. Notably, 33% of the bank’s reserves are now held in gold, well above the 7% global average for central banks.
Strategic Rebalancing Pays Off
Early in 2024, CBCS sold 30% of its gold holdings to optimize reserve composition and reinvested the proceeds in fixed-income securities. Despite the sale, the value of gold increased so sharply throughout the year that gold’s share in total reserves essentially returned to pre-sale levels.
The reinvestment strategy proved successful. CBCS reported that the gold sale contributed more than 16% to total investment returns for the year. Additionally, active portfolio management outperformed benchmarks, generating a net extra return of Cg 0.9 million after fees.
“We continue to prioritize liquidity, capital preservation, and return in that order,” the report noted, explaining the rationale behind keeping investment durations short and focusing on U.S. Treasury benchmarks, particularly in the 0–3 and 0–5 year ranges. This conservative strategy helped minimize losses in previous years and take advantage of positive yields in 2024, with short-duration benchmarks delivering 3.82% to 4.46% returns.
Steady Growth Despite Market Challenges
CBCS investments remained focused on fixed-income assets, avoiding equities such as the S&P 500, in line with the institution’s low-risk policy. The broader U.S. fixed income benchmark (Bloomberg US Aggregate Index) delivered a modest 1.25% gain in 2024.
Meanwhile, the transition from hold-to-maturity to mark-to-market portfolios, initiated in 2022, continues to improve the bank’s ability to generate revenue and respond flexibly to market changes. Though the shift caused capital losses in 2022, the benefits are now evident in growing returns and enhanced transparency.
Efficiency and Oversight Enhanced
Further efficiency was achieved in 2024 by consolidating the portfolio under one global custodian, improving performance tracking, compliance monitoring, and reducing operational costs.
With assets now at their highest level in years and gold continuing to be a key component of the reserve strategy, the CBCS has demonstrated resilience and adaptability in a volatile global environment.
The report makes clear that the central bank’s cautious, data-driven investment approach—focused on stability and long-term returns—is paying off, helping to safeguard the peg of the Netherlands Antillean guilder to the U.S. dollar and support economic stability across the monetary union.
