Curaçao and Sint Maarten

A resilient central bank balance sheet is essential for maintaining confidence in the financial system, safeguarding foreign reserves, and supporting the credibility of the exchange-rate peg. At the request of the Central Bank of Curaçao and Sint Maarten (CBCS), IMF technical assistance developed a comprehensive balance-sheet stress-testing framework to strengthen the CBCS’s capacity to assess financial risks and policy solvency under adverse macro-financial conditions. The framework evaluates the CBCS’s ability to preserve capital and reserve buffers, generate sustainable income, and continue fulfilling its policy obligations under a range of severe but plausible shocks. The analysis examined the resilience of the CBCS under three scenarios: (i) a sharp economic downturn accompanied by pressures on foreign reserves and the exchange-rate peg; (ii) a period of elevated inflation and interest rates; and (iii) a significant correction in gold prices. • The results show that the CBCS remains financially resilient but highlight the importance of strengthening recurring income generation alongside maintaining robust capital buffers. The engagement also delivered a comprehensive stress-testing toolkit—complete with fully documented analytical code, an intuitive user guide, and hands-on training to empower CBCS staff with long-term operational autonomy. Together, these outputs enable the CBCS to regularly assess emerging risks, support evidence-based reserve management decisions, and strengthen its capacity to safeguard monetary and financial stability over the medium term.