publication of this data. i conclude these opening remarks by stating simply that, information is the oxygen of all modern economies. the domain of the eastern caribbean currency union as essential background to this presentation, it is necessary to identify the domain of the eastern caribbean currency union. it comprises eight countries, which have in common, the use of the ec dollar as their currency. these countries have a combined area of 1, 163 square miles, with a population of approximately 600, 000 people. the total output, measured by the gross domestic product ( gdp ) of the union for 2004, was estimated at $ 8. 8 billion, with a capita income of $ 14, 844. the total exports of goods and services for 2004 was $ 4. 5 billion. of this total, commodities contributed twelve per cent, and tourism services sixty - three percent. the foreign exchange reserves of the eccb provide a 96 per cent cover for the currency, well above the requirement of 60 per cent stipulated in the eccb agreement, 1983. the currency in circulation at the end of december 2004 was $ 663 million, while the commercial banking system held deposits of approximately $ 12 billion, and loans of over $ 8 billion. it is important to portray the concept and inclusiveness of the currency union through the aggregates i have highlighted, since these serve to illustrate that the whole is greater than the sum of its individual parts. one of the concrete and beneficial manifestations of this fact has been our ability to maintain the value of our currency at ec $ 2. 7 to the us dollar, for the last twenty - eight years, despite the many difficulties faced by our member countries individually. it is against this background that we examine the economic performance of the currency union in 2004. the economic performance of the currency union in 2004 growth the currency union experienced positive growth for 2004 estimated at 4. 1 per cent. this can be attributed to the performance of the tourism industry, which recorded a significant increase in both stay - over and cruise - ship arrivals. our analysis indicates that the performance of this sector was due to increased buoyancy in the economies of our major tourist markets, namely the united states of america, the united kingdom and europe ; the depreciation of the us dollar relative to sterling and the euro ; intensified marketing efforts ; and increased airlift. banana output rebounded during the year, but one has to take into consideration the major fall in output in the previous year. the factors which contributed to this improved performance were

- matched financial system that acts as a buffer against any turbulence. • a managed floating exchange rate regime. far from being erratic, each move in this strategy has been in line with the intertemporal goals of equilibrium in the monetary market, the preservation of the value of currency and the stability and depth of the financial system. i say “ intertemporal ” because the central bank has “ an across - the - cycle ” view rather than a short - term one. in the first place, our policy guarantees the stability by ensuring the equilibrium between supply and demand for money. thus, we see that the current regime of control over money supply combines the necessary doses of monetary prudence ( as shown by sixteen running quarters of compliance with self - imposed monetary aggregate targets ) and flexibility ( which has enabled us to weather recent turbulences ). we have consolidated the monetary policy scheme based on the control of money supply since it is the most adequate for an economy in transition, which still makes intensive use of relatively liquid means of payment and has a relatively low bank penetration. the strategy is implemented through various instruments which allow us to absorb the supply of pesos derived from our fx accumulation policy. this aggressive policy is feasible because the central bank has a strengthened balance sheet and positive annual results. instruments include the placement of securities at fixed and floating rates, the repo market, the reserve requirement policy, and the early payment of rediscounts. the latter resulted from central bank incentives and led to a significant monetary absorption over the last years. we have also been working to deepen the repo market and to empower its interest rate as a reference policy tool. we have been gradually but persistently hiking this rate. since 2005, the interest rate on 7 - days repo operations has increased by more than 500 basis points, acting as an important absorption instrument. recently, we have established a regular auction mechanism to provide daily liquidity and we have expanded the universe of securities taken as underlying assets for these operations. what does the recent trend in money supply reflect? m2 shows a downward trajectory, with a steep fall in its year - over - year change in 2007 - 2006 vis - a - vis growth rates in 2003 and 2004. in fact, for the first time after the crisis, the money supply is growing below the nominal gdp. these are clear indicators of our monetary policy prudential bias. also, state - owned banks have started to manage their liquidity more in line with the