Shippers reeling from US currency shortage
The Shipping Association of Trinidad and Tobago (SATT) is appealing to banks and hoarders as its members continue to experience increasing difficulty in purchasing sufficient US dollars to meet their liabilities to shipping lines.
The SATT said in a media release yesterday, “Agents are using long-standing relationships with their principals to maintain confidence that the system will return to normal. All cargo is charged in US dollars and it will go badly for the commerce of the nation if every consignee is required to pay in US dollars rather than in TT dollars as at present.
“The equivocal statements by some banks - and by the Central Bank itself—do not provide any reassurance that the managers of our foreign exchange system are in control of it. There are only 12 authorised dealers in foreign exchange in our market, and there is responsibility from that privileged position to do more than if this resource were freely available to all. To announce that all available funds are distributed is to shrug off the public’s concerns as to what many perceive to be a contrived shortage, sic, shortage caused by hoarding.
“Equally unhelpful is the Central Bank’s conclusion that its responsibility has been met by its supply of US$193 million to satisfy the ‘market shortfall...’ Only when rates are freely floating can it be said that supply exactly equals demand, and our membership’s anxiety arises from the fact that the Central Bank’s supplemental supply is substantially shorter than the demand in the system remaining from what the authorised dealers have been able to obtain,” the statement said.
The SATT warned other outcomes of a shortage are:
—A significant increase in the exchange rate used by agents; commensurate with the increase being charged by some “dealers” in providing US dollars;
—Freight costs will have to be paid in US dollars – further exacerbating the situation;
—Increased costs to consignees/importers in demurrage and other associated costs arising from delayed payment.
“We are therefore calling for greater co-operation between the Central Bank and the commercial banks/dealers to stem the drain on foreign exchange resources which we attribute to hoarding and other “opportunistic” behaviour on the part of a privileged few. Clearly more decisive action needs to be taken to restore balance to the trading system,” the association said.