Through the Lending Facility Program (LFP), the CBA can, on request of the commercial banks, provide liquidity support denominated in Afl. and/or USD to the commercial banks that face temporary liquidity constrains and/or unexpected need for liquid funds in the form of collateral loans, insofar the qualifying conditions are met. In this way, the CBA aims to promote a smooth functioning of the payments system and foster financial stability.
The LFP consists of an overnight lending facility, a primary lending facility, a secondary lending facility, and a tertiary lending facility through collateralized loans, under certain terms and conditions. The interest rate for each facility of the LFP is determined by the weighted average interest rate for the latest three (3) months Treasury Bills issued by the Government of Aruba as the base (base rate), which is increased by the following applicable margins:
The CBA publishes on its website the applicable LFP rates, following each Treasury Bills issue by the Government of Aruba.
