PHILIPSBURG--When it comes to the official currency of the country – the Netherlands Antillean guilder, businesses in St. Maarten do not necessarily have to apply the official exchange rate as the official rate is only applicable to foreign exchange banks.
According to the Central Bank for Curacao and St. Maarten (CBCS), businesses can actually apply exchange rates that differ from the official exchange rates and it is up to the consumer to decide which currency to use to get the best price.
CBCS provided the information to The Daily Herald in response to several questions on this issue. A number of establishments in the country apply different exchange rates - some 1.80, some 1.82, some 1.77 etc. CBCS was asked whether it is legal for establishments to apply different rates and if so on what basis is this done and what is the recourse for consumers.
According to CBCS businesses may apply exchange rates that differ from the official exchange rate. “The official exchange rates published by the CBCS only apply for foreign exchange banks. There are no regulations that prescribe the exchange rates to be used by businesses,” explained CBCS in its response.
“A customer should therefore make its own calculation to determine in which currency he gets the best price. For example, when a business offers a product for US $1.00 or NAf. 2.00, it is cheaper to pay in dollars (you could buy dollars at the bank for NAf 1.82, which is cheaper than NAf 2.00). However, when a business offers a product for US $1.00 or NAf. 1.76, it is cheaper to pay in NAf.,” CBCS advised.
CBCS said in St. Maarten, the US dollar is widely used and many residents have domestic (resident) US dollar accounts. “If a transfer is made from a resident NAf. account to a non-resident US dollar account, the exchange rate is 1.82 (including the 1% license fee),” CBCS said. “However, if a transfer is made from a resident NAf. account to a resident US dollar account, the exchange rate is 1.80 (excluding the 1% license fee, which is only due for transfers from residents to non-residents). If a transfer is made from a resident US dollar account to a non-resident US dollar account, there is no exchange rate, but still the 1% license fee will be charged because it is a transfer from a resident to a non-resident.”
CBCS publishes the official exchange rates (including for the US dollar) on a daily basis (https://www.centralbank.cw). These rates must be used by the foreign exchange banks for transactions between residents of St. Maarten and non-residents up to transaction amounts of NAf. 25,000. For higher transaction amounts, foreign exchange banks are allowed to use a different exchange rate.
For more details on the correct exchange rate and license fee due for various types of transactions, consumers can consult the License Fee Matrix at: https://cdn.centralbank.cw/media/legislation_guidelines/20191107_license_fee_matrix.pdf
https://www.thedailyherald.sx/islands/cbcs-businesses-not-required-to-use-official-exchange-rates
