Foreign exchange woes ‘a timing issue’
As business groups continue to call for a resolution to the tightness in the foreign exchange market, Bankers’ Association president Larry Nath is advising customers to keep checking in with their banks.
In a telephone interview with the Express yesterday, Nath said the difficulty some customers were having getting cash at commercial banks was a “timing issue”.
He advised customers to check back ever so often with their banks, especially since foreign exchange sourced from conversions by energy companies especially was beginning to come into the system, as these companies prepare to pay taxes (June 30 is a tax end).
Nath noted their exchange of foreign currency into local currency will start to flood the market.
“If you go to the bank and can’t get (foreign exchange) that day, stay in contact with the bank because the supply is coming in,” he said.
He acknowledged there had been rumours of foreign-exchange hoarding, and said while that may have initially been the case, with the Central Bank’s intervention (US$610 million for the first five months of the year), the situation had improved with a better balance of demand and supply.
Nevertheless, the Trinidad and Tobago Chamber of Commerce and the Chaguanas Chamber of Commerce are asking for a statement from the Central Bank, commercial banks and the Ministry of Finance explaining the difficulty their members face attempting to acquire foreign exchange.
“We certainly believe that these injections have resulted in some reduction in the current queue for US dollar demand; however, even today we have continued to hear from our members and the wider business community on how the continued shortage of foreign exchange has affected business operations in Trinidad and Tobago,” the chamber said in a statement on Monday night.
“The T&T Chamber wants to continue to encourage discussions and dialogue to find solutions to the foreign exchange issue. We want to ensure that any system put in place will alleviate what is a growing challenge for our private sector, and, by extension, the wider community,” said chamber chief executive Catherine Kumar.
The Chaguanas Chamber also said in a release yesterday that despite assurances from Minister of Finance Larry Howai and Central Bank Governor Jwala Rambarran that there is no shortage of foreign currency, its members continue to be frustrated as they are unable to obtain US dollar funding in both uncollateralised and collateralised markets.
“Given that for many businessmen, lost time equates to money lost, it is disappointing that after queuing in line for more than an hour, businessmen are told that the transaction cannot be concluded due to the unavailability of foreign currency.
“Most businessmen have to opt for much lower sums than requested, invariably affecting their credit rating with suppliers in the US and as far as China,” the Chaguanas Chamber said.
The quantity of foreign exchange in the commercial banking system (from customer deposits) is about US$4 billion. The overall demand is about US$6 billion—a difference of US$2 billion that is usually picked up by the Central Bank.