There will be no devaluation of the Trinidad and Tobago dollar.
That was the strong sentiment from Prime Minister Dr. Keith Rowley, in response to a question in the Parliament about the challenges surrounding the availability and distribution of foreign exchange.
Trinidad and Tobago largely earns foreign exchange from the energy sector through exports of LNG, gasoline and diesel, and petrochemicals such as ammonia and methanol.
The Prime Minister noted that over the past ten years, there has been no reduction in the market place of the Government’s support for foreign exchange.
“The amount of foreign exchange available in the local banking system Madam Speaker in 2003, 2023 to 2024, is about the same available in 2014, that is approximately US$7 billion.”
He laments rather there’s a misalignment between the appetite to spend foreign exchange and the ability to earn foreign exchange.
“Of this total, the Government directly injects $2.5 billion per year. That’s the system that we operate, with the remaining $4.5 billion acquired by the banks directly from the US-dollar earning clients. However in 2024, there is clearly an increased demand for foreign exchange due to the growth in the economy, and an increase over the years in the taste in foreign goods and for the use on online purchasing.”
In looking toward solutions to the Forex challenges, a few Economists suggest the TT dollar be floated, while others are calling for the currency to be devalued by as much as TT$10 to US$1.
The Prime Minister says any devaluation of the TT dollar would naturally result in increased costs across the board.
“Let me save them from wasting their time today, there will be no devaluation of the currency because Madam Speaker the pressure on the Government to devalue the currency is coming from people who have foreign exchange largely using their attempt in the country to make this an issue.”
Minister of Finance Colm Imbert has been meeting with stakeholders, including the four major banks, to arrive at a consensus on the management of the country’s foreign exchange.
The Prime Minister suggests the solution may involve more regulation of the method and manner of distribution of Forex that is injected into the commercial banking system by the Central Bank on a monthly basis.