cleviston haynes : cash will remain a part of the mix speech by mr cleviston haynes, governor of the central bank of barbados, bridgetown, 4 june 2019. * * * just over a decade ago the bank hosted its first currency exhibition, as ensuring a steady supply of money in circulation is a natural extension of one of our core functions. thirteen years later, much has changed. for some, the assertion that “ cash is king ” has been replaced by the question “ is cash dead? ” in many ways this is not surprising. alternatives to cash are increasingly popular. credit cards, debit cards, mobile wallets, etc., appear to be displacing traditional payment instruments such as cheques and cash. globally, smartphone apps and other technological advances seem poised to transform payment systems as we know them. now, for the younger persons here today, the idea of paying for something using your phone probably doesn ’ t seem extraordinary, but this is something i certainly did not imagine when we were your age. nevertheless, the bank understands the need to adapt in general. more specifically, we have to adapt to the requirements of the new digital age. being able to collect and make payments more efficiently is a key part of the digital transformation that the economy will undergo. it has the potential to enhance productivity and overall competitiveness. we are committed to working with government to improve the payments infrastructure, including through the reduced use of cheques and cash. this should contribute to speedier, secure settlement of transactions. so why an exhibition celebrating cash? while we aim to decrease significantly the use of cash, we cannot ignore that at present it accounts for a significant percentage of the transactions made in barbados. currency in circulation is about 7 % of gdp. however, there is already increasing usage of credit and debit cards the transactions through the automated clearing house. while cash remains relevant now, it is facing increased competition as an instrument for payments. but we believe that there will remain a place for cash. a wholesale shift to digital payments or even debit and credit cards has implications for financial inclusion. for the traditionally unbanked, access to cash allows participation in the economy. the same is true of many older persons and other vulnerable members of society. cash also serves as a backup in the event that the networks that power other forms of payment go down during and after a natural disaster or due to technological glitches or security breaches. the importance of retaining some level

3 %. tourism continuous recovery shall give a better support to growth this year. the tourism sector has a significant impact on thai economy as the sector accounts for 12 % of gdp and employs over 20 % of total employment, both directly and indirectly. 1 / 4 bis - central bankers'speeches the drag factors that will drop off in 2023, there was a huge inventories drawdown, which equivalent to 4 % of gdp. we expect that to happen much less this year. more fiscal spending would be disbursed once the fiscal budget is approved in april and accelerate in the second half of the year. exports will expand as global good cycle returns ( expect export value to be positive in 2024 compared to - 1. 7 % yoy in 2023 ). on the inflation front, the disinflation process has been faster than expected ( peaked at 8 % in august 2022 / 7 months later back to our target range of 1 - 3 % ). recently, headline inflation figures were negative and will remain negative until april, but deflation risk is quite low for several reasons. first, the recent negative headline inflation was mainly due to supply factor, especially government subsidies on energy and electricity prices. if we exclude the subsidies, the headline number would still be positive. second, the price decreases were not broad - based, the categories of goods and services with price declines were around 25 % of total cpi basket, while the other 75 % are either stable or increasing. third, inflation expectations are well - anchored within the target range around 2 %, and we do not observe broad weakness in consumption that would usually be observed in deflation circumstances. on the financial front, we expect non - performing loans ( npls ) to increase, but low chance of an npl cliff ( npl is at 2. 7 % as of q4 / 23 ). in addition, some corporate bonds may face repayment difficulties, especially in the high yield segment, but impact should be limited and contained. meanwhile, financial markets will remain volatile. why an increase in npl is not a surprise : during the crisis, a lot of measures were implemented to support borrowers, such as regulatory forbearance measures to encourage debt restructuring. when the economy is going back to normal, it is not appropriate to continue with these measures as their continued existence could create undesirable and unintended consequences. with the fact that we have significant shares of borrowers under various kinds of supporting