Saturday, December 16, 2017

Dollar depreciation has merit *

Governor Hilaire on forex adjustments:

LOOSING COMPETITIVENESS: Central Bank Governor Alvin Hilaire

CENTRAL Bank Governor Alvin Hilaire yesterday acknowledged that the arguments for exchange rate adjustments to be used in countries suffering from terms-of-trade shocks do have merit.

“Basically, any regime can work if you have fiscal, monetary and structural policies supportive of it. And the policies also have to be bolstered by credibility and sustainability,” said Hilaire, citing examples of fixed-exchange rate regimes, flexible exchange rate regimes and those in between.

He said countries that adopt fixed exchange rate regimes have to rely more heavily on the imposition of taxes to reduce demand for foreign exchange and generate government revenue.


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