Trinidad Central Bank moves to ease foreign exchange shortage
PORT OF SPAIN, Trinidad (CMC) –The Central Bank of Trinidad and Tobago says it is selling US$200 million to authorized dealers as it seeks to ease a shortage of foreign currency in the country.
The Central Bank said that it met with bankers earlier this week “and mutually agreed to further improvements in the distribution of foreign exchange”.
It said the “sizeable intervention together with the enhanced distribution system will help to restore normalcy and eliminate accumulated, unsatisfied demand”.
Earlier this week, the Trinidad and Tobago government said there were no plans to devalue the local currency as the main opposition People’s National Movement (PNM) called for an end to the new system of foreign currency allocation that it claims could lead to the creation of a black market that would eventually lead to a devaluation of the local currency.
Finance Minister Larry Howai said that there was more than sufficient foreign reserves to deal with the needs of the country and that the foreign exchange reserves had continued to increase and was estimated at TT$10.3 billion (One TT dollar = US$0.16 cents), which was more than 12 months of import cover.
He said the issue was the new system put in place by the Central Bank.
Earlier this month, the Central Bank of Trinidad and Tobago (CBTT) reiterated that it is taking “aggressive steps” to deal with the “unusual degree of tightness” being experienced in the local foreign exchange market.
But the Trinidad and Tobago Manufacturers Association (TTMA) said it is dissatisfied with the continued struggle faced by member companies in accessing foreign exchange for business operations.The Central Bank said the latest sale of US$200 million brings to US$610 million it has sold within the past five months.
“The Central Bank wishes to assure the general public and the business community that the country has enough foreign exchange reserves to satisfy demand.”
It said that as of May 16, the level of Net Official Reserve stood at US$10.3 billion “more than enough to cover over one year of imports”.
The Central Bank said that it would continue “to monitor conditions in the domestic foreign exchange market and will take further appropriate action, if necessary”.
