By Alicia Chamely

THERE is no evidence of any “forex cartel,” in Trinidad and Toabgo says Central Bank Governor Larry Howai.

Howai was answering questions at a media engagement on Thursday at the Central Bank, Port of Spain.

On May 15, Prime Minister Kamla Persad-Bissessar announced at the post-cabinet press briefing, held at the Red House, Port of Spain, that her government would be compiling a report on foreign exchange distribution, hinting that there may a “conspiracy” between certain businesses and operatives to access large amounts of forex.

She had said, “This is a serious matter. We need to know where the forex went, to whom it went, why it went and how it was deployed, those reports will come to us and we will share them with you.

“This report will be made public to identify the main users, the main facilitators of this main distribution and explain to the public how this entire forex distribution cartel and conspiracy between certain operatives and businesses was functioning.”

Opening himself up to questions from the media, Howai was asked as to whether there was a foreign exchange cartel.

Responding, Howai said, “From our perspective we have no evidence of a cartel.”

He said while he was aware of a black market, there was also a grey market.

Howai explained that this was where an individual was banking their USD outside of the country.

He said, while this was legal, more needed to be done to incentivise people to bring and bank their USD in T&T.

Asked as to whether there was a forex crisis, he said, “Yes, we do have shortages and so on, but over time, needs get met. They do not get met right away but they do get met.”

He said the demand for foreign exchange was over USD$6 billion a year.

Howai said, “There is foreign exchange but there is a huge demand in our retail and distribution sectors,” noting this demand comes from nation’s consumption levels.

He said, however, with measures, the Central Bank was hoping to implement initiatives and investments to be announced by the Finance Minister in the upcoming budget for an increased flow of foreign exchange into the country.

Addressing the inequity of distribution of foreign exchange, Howai said that priority was often placed on addressing national needs versus personal needs. He said when it came to the distribution of foreign exchange preference was often given based on what the money was needed for. For example, he said USD would be quicker given for business expenses or medical expenses, versus money for a vacation.

He said, “Equitable is not always equal,” adding that the distribution system needed to be more transparent, while considering confidentiality.

Regarding members of the public having access to their own USD cash in local bank accoints, Howai said that problem stems from the banks not keeping enough cash in their individual branches.

The governor said for banks, holding cash was expensive. Noting it had to be insured, moved, there were security risks and costs. He said this should not hinder an individual’s access to their own money and this issue was going.

Pointing out that T&T was about to enter a heavy shopping/import season, the media asked Howai how the Central Bank planned to handle the demand for forex.

Howai said, “Right now I cannot say that we have any immediate plans to make any changes based on what we have and what can put in the market, and I do not want to increase the amounts that I can put into the market at this stage.”

He said consideration was being made to adjust the amount of forex being injected into the market based on the time of year and the demand. He said, for example, more money would be injected during peak consumption seasons such as Christmas and reduced during lower seasons such as January.

Howai said, however, at the moment there were no plans to implement this measure.

Addressing, T&T’s consumption patterns that had raised the demand for USD, Howai said the Central Bank had no intention of interfering with the market.

He said limiting consumption was “extremely difficult to do in a liberal market.”

Howai said more needed to be done to encourage individuals to earn their own foreign exchange.

Using the media as an example, he said, foreign exchange could be earned through podcasts and blogs.

Howai said the internet had given everyone an excellent opportunity to earn their own foreign exchange.