Once again, this armchair economist pontificates from a shallow knowledge pool of local conditions, having just a passing knowledge gained from Encyclopedia Internetica and the USA Today version of economics.

The monolithic economy of the Bahamas does not have a variegated strata of a middle class or a business class with a diverse cross section of economically stable individuals with diverse revenue streams. Without a central credit bureau & a credit rating agency for individuals, the only means of assessing creditworthiness is a government pay cheque with guaranteed deductions at the source, and no consumer protection legislation the amount of deductions on a person's take-home pay. There are widespread anecdotal stories of final government pay cheques less than $100 after consumer load deductions at the source.

Again due to the lack of viable credit information, it is almost impossible to access capital to create or expand a business, especially if an entrepreneur has no track record. In any and all economies in the free world, it is the SMB (small and medium size businesses) that drive economic growth. With no access to capital, this economic engine is impotent in the Bahamas. One must seek business growth with private capital, and that is a closed club, as the pontificating presbyopiast should know from his various failed ventures.

As a result, the banks are incredibly efficient (and voracious) in using their excess liquidity to tap the consumer loan market. The high interest rates are akin to those offered by payday loan companies, and it is justified in terms of global business practices of charging a high interest rate for riskier loans. And the fact that a government pay cheque or a BTC or BEC pay cheque is tendered as a loan guarantee, is no indicator of creditworthiness as the local banks are awash with NPL or Non-Performing Loans. Has anyone seen the properties that the bank owns on mortage repossessions? It fills three pages of advertising. So from the banks' point of view, the higher interest rate is in line with standing lending practices.

The fact that banks can make hundreds of millions of dollars of profit is testament to their success at filling a local economic niche that is not found in other countries with a more diversified economy and a stronger middle class.

The socio-economic fabric of the country is dysfunctional and broken. There is only one thing that will fix it, and that is economic diversification. Without it, surely the Bahamian dollar must be devalued to its true level, which with the national debt, small population, and a broken economic engine, is about 15 cents on the American dollar.

It is too late to dollarise the economy. The national debt in domestic currency is a millstone around the economic neck of the country, and the unfunded billion dollars that the government owes to NIB can be the thing that brings down the house of cards. Interest rates are the least of our worries.

Bravo. If anything the ratings of the Bahamas should be lowered. A truly defunct system drifting towards China and Socialism.

That sentence made me cringe. What are you even aiming at.

The IMF is not to be trusted .............. follow their track record in the Third World............ they have left a trail of destruction among the nations who have fallen under their influence. The IMF "experts" do not work for the best interests of the Third World. Why do we entertain them?????

We entertain them because they offered assistance to budding nations or we had to by the nature of world politics work with the IMF in order to improve international relations. Are you another nationalistic bahamian believing we are a free and clear sovereign nation with the ability to act independently focusing on our own wants? The only nations with the ability are very socialistic and even the closed economy ruralists still depend on international bodies.

You are a dreamer ........... I accept your worldview

First of all the VAST majority of Bahamians don't have any savings to talk about and thus are barely effected if the interest rates on savings go from 1% to 0.25% - we are literally talking about a difference in pennies for 99.9% of Bahamians. And, those very few of us that have a few hundred thousand or millions of dollars in savings won't be hurt very much from a lower interest rate on savings because they probably are still working or still own their businesses which brings in their 'spending' money. A lower mortgage/lending rate will not only keep thousands of us in our homes but it will also mean that 10's of thousands of us will have money to spend in an economy the desperately needs the money. Scotiabank lowering their interest rates (to 3.99% for new and existing loans if you borrow a little more) can literally restart our economy and is something the Central Bank should have done 5+ years ago.

There are no local economic engines to restart the economy. Consumer debt is already at an all-time high, as is Non-Performing Loans. The economy can only be jump-started with job creation. With lower interest rates and more borrowing, we would only be making foreign corporations who sell us stuff, richer. Any bonus to the consumers, for example a Christmas bonus, is always spent at Walmart in Florida. The monolithic economy in the Bahamas is immune to any injection of consumer spending because of the non-productivity and non-Bahamian ownership of the economy.