Bahamas expects more than US$1bn in reinsurance payouts from Dorian
Reinsurance settlement inflows to the Bahamas tied to last year’s Hurricane Dorian are set to top US$1bn, with more than half going to local residents, according to the governor of the Bahamian central bank.
John Rolle, speaking at a recent event, said the US$1bn+ reinsurance settlements were more than the island nation had ever seen with an event. “The portion of inflows to local residents will exceed US$500mn. A healthy level of receipts will also help non-residents finance their rebuilding,” he was reported as saying by local daily Tribune.
Rolle added that access to foreign currency at local commercial banks and financial institutions was key to recovery efforts. “For the central bank, our capacity to either stimulate the recovery or to give the lending institutions the scope to do so also depends on whether the external reserves, in combination with other access to foreign exchange, are able to finance imports of goods and services needed for a recovery.”
“The central bank has to satisfy this outcome while preserving the Bahamian dollar fixed exchange rate regime. This task always presents itself coincidental to a pause or slowdown in foreign exchange inflows from tourism activity,” said Rolle, speaking at the Bahamas Business Outlook conference.
The history-making hurricane struck Abaco Island with 185mph (300kph) sustained winds on September 1 last year in a slow march that wreaked havoc over a swath of the nation’s northern tier, including the major tourism hub of Grand Bahama.
Damage from Dorian is now estimated at around US$3.4bn with rebuilding expected to last three years.
The nation’s prime minister, who is also its finance minister, K. Peter Turnquest, has signaled the nation may have to turn to international debt markets to finance the government’s recovery efforts.
Turnquest recently said the Bahamas was looking at borrowing US$500mn in the coming months with some combination of an international bond sale and tapping the local debt markets seeming likely.
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