The People’s National Movement (PNM) is calling on Government to stop the new system of foreign currency allocation, which they claim is leading to the auctioning of US dollars, the creation of a black market, and which would eventually lead to a devaluation of the Trinidad and Tobago dollar.
Opposition Leader Dr Keith Rowley said in an attempt to fix what was not broken, the Government has broken the system.
“And the Governor of the Central Bank stands in his shoes and wonders,” he added as he addressed a news conference at the Opposition Leader’s Office, Charles St, Port of Spain.
PNM MP Colm Imbert said PNM Senator Lester Henry had frequently said that the Governor of the Central Bank is a square peg in a round hole.
“I am now tempted to agree with him,” said Imbert.
Henry said the Central Bank implemented a new system on April 1. It expanded the pool of authorised dealers for US currency from the six commercial banks to 12 entities—including Development Finance Limited, Neal and Massy Finance, Ansa McCal Finance, and General Finance Corporation.
He said the Central Bank has also allowed the big foreign exchange earners such as Petrotrin, NGC, PCS Nitrogen and BPTT (who earn approximately US$5 billion a year), to allocate a 25 per cent portion of their foreign exchange earnings to any one of the 12 players.
Rowley said “the non-transparent identification of who will get what”, the allowing of the big earners “to cherry-pick” who gets foreign exchange, was not helping the situation. He said the Opposition office was being flooded with reports from users who have suddenly found that they don’t have a ready supply of foreign exchange.
“Once there is a conversation in the national community that US dollars are short, hoarding will follow and people will also attempt to take it (their foreign exchange) out of the country,” he said.
Imbert said: “The Central Bank is now auctioning foreign exchange and in any auction obviously the highest bidder wins...It is a crazy system.
“The last time there was a black market for foreign exchange was the late 1980s.”
Imbert said the Bankers Assocation was saying nothing about the problems of the new system because the president of the Association was Larry Nath, CEO of First Citizens Bank “and he has his own troubles. Don’t expect him to say anything (about the new foreign exchange policy)”.