The currency union with Sint Maarten and the island's limited exposure to international financial markets will protect against strong depreciative pressures and exchange-rate volatility in 2021-2022. We expect the government to retain the Netherlands Antilles guilder as efforts to introduce a new currency, the Caribbean guilder, have stalled.

Sint Maarten and Curaçao, which formed a currency union in 2010, had intended to adopt the new currency jointly, but Sint Maarten has a preference for adopting the US dollar, which Curaçao opposes. We expect the union to remain intact during the 2021-22 forecast period at least, with the Netherlands Antilles guilder pegged to the US dollar at Naf1.79:US$1.