Parliament’s meeting of the House of Representatives ended Friday around 10.30 p.m. with a statement from Finance Minister Larry Howai reiterating that there is no foreign exchange shortage in the country.
“There is no foreign exchange crisis. Let me repeat that, there is no foreign exchange crisis and I’m not just talking about US dollars ... I’m talking about euro, yen, sterling—whatever currency you are looking to acquire. There is no foreign exchange crisis.
“There are some issues around the timing of getting funds which is something that has been ongoing over the past 20 years. It is not something that is new that didn’t exist that suddenly is appearing on the horizon,” Howai told the Parliament.
He was responding to a motion by Opposition MP Colm Imbert on “Government’s failure to deal effectively with the current foreign exchange crisis”.
Imbert’s motion was the last of the night, in which he requested Howai explain why Imbert couldn’t get foreign exchange at the teller counter at commercial banks, despite ongoing injections from the Central Bank (now over US$650 million for the year to date.)
Imbert also accused Central Bank Governor Jwala Rambarran of being an on-the-job trainee with no experience managing a large organisation.
“I am speaking the truth and going to take full responsibility for that. The Governor of the Central Bank has introduced a system where 90 per cent of the available foreign exchange is auctioned to 12 foreign exchange dealers including foreign exchange dealers who have a very small customer base ... giving large sums of foreign exchange to financial institutions that don’t need it,” Imbert said.
At a conference at the Chamber of Industry and Commerce in Westmoorings on Friday morning, Rambarran noted the Central Bank was not responsible for the distribution of foreign exchange but for maintaining a balance in the market.
He added that the Bank did not change the allocation system but had modified it, increasing the number of authorised distributors from eight to 12, and allocating funds based on market share; the auction system where institutions that request more foreign exchange than had been allocated, was introduced in May 2012, before he was appointed governor (in July 2012).
He noted that since 2009 Central Bank intervention into the market had actually been trending down.
The demand for foreign exchange in Trinidad and Tobago is about US$6 billion; commercial bank customer receipts total about US$4 billion; the Central Bank usually intervenes to make up the shortfall of about US$2 billion.
Trinidad and Tobago has foreign exchange reserves of about $10.2 billion, or more than a year’s worth of import cover.
Central Bank statistics show the country’s largest earner of foreign exchange is the energy sector, providing 75 per cent of the supply in 2013.
The manufacturing sector produced four per cent but demand from that sector was about 13 per cent. The automobile sector (including used and foreign used vehicles) demanded eight per cent.