THE Finance Minister Colm Imbert previously stated that the country is experiencing a foreign exchange shortage, not a crisis.
He made the statement a couple of months ago while speaking at the Jamaica Trade Mission conference at the Hyatt.
However, the government tries to deny the truth. It is clear that we are undergoing a foreign exchange crisis in Trinidad and Tobago. Everyone, especially businesses that require foreign exchange to buy their goods know that there is a serious foreign exchange crisis. The Minister of Finance, and the Central Bank of Trinidad can spin it however they want but they can’t hide the fact that the banks are clamping down on releasing foreign exchange to their clients.
Just last week Republic Bank immediately reduced their credit card US dollar transactions by half to their customers from US$10,000 to US$ 5,000 and this will have a drastic effect on many small and medium sized enterprises (SMEs) throughout the twin islands.
For over five years businesses have been complaining that they can’t get foreign exchange and some have had no choice but to go to the black market to access the currency, in order to service their suppliers and obtain their goods.
These SMEs are the cornerstones of the business structure in Trinidad and Tobago and with this new cut in their credit card access to US dollars, we expect serious fallout as this move will affect them tremendously.
Republic Bank ‘s actions are a sign of the times where many other local banks in Trinidad and Tobago have made reductions over the last five years. Republic Bank was one of the last banks that gave you this US$10,000 limit. Many of the other banks give much lower limits to the access of US Dollar transactions.
These SMEs depend largely on their credit card facility to purchase their foreign goods and pay their suppliers and they will surely suffer by the decision of the Republic Bank to withdraw the facility.
The minister of finance and the governor of the Central Bank, has not even said anything in the public domain about Republic Bank’s move to reduce their US dollar limit and this just shows how much they really care about our business community in T&T.
They are so disconnected from the citizens it has reached an absurd level. One wonders if a devaluation of the dollar is looming in our future, although the minister constantly assures the country that this would not happen, we are wondering because SMEs can’t access the US dollars required to run their businesses properly. What can we do? If a devaluation would help the situation, many may prefer that move that this level of hurt they are experiencing.
The minister keeps saying that we have enough foreign reserves of close to seven billion US and we have the Heritage funds back up of approximately five billion US, so we are covered, but are we really?
Maybe he may start a new spin to blame the Opposition for the shortages in the US dollar and say that the economic downturn is the Opposition’s fault too. Minister please listen as our SMEs are scared and suffering and businesses are also scared to invest in a country that isn’t safe and stable. That is the reality and where we are now.
Neil Gosine is an insurance executive. He is also the treasurer of the UNC and a former chairman of the National Petroleum Marketing Company of Trinidad and Tobago. He holds a Doctorate in Business Administration, a Master’s in Business Administration MBA, BSC in Mathematics and a BA in Administrative Studies. The views and comments expressed in this column are not necessarily those of AZP News, a Division of Complete Image Limited.
Surely neither the govt nor the central bank manufacturers foreign exchange while the onshore private sector while it produces little of it needs a large quantity of it to conduct its business. Virtually all of the foreign exchange is produced by the petroleum sector, an industry that is contracting as the petroleum depletes and is affected by climate change.
What is alarming is that the complaining private sector seems totally unaware of the economy in which they operate, where the foreign exchange comes from as they keep demanding that govt alleviates the foreign exchange shortages!!!!
They seem totally unaware that earning foreign exchange is expected of the private sector not simply consuming it.
Stc