TRINIDAD and Tobago’s foreign exchange (forex) challenges have become increasingly obvious, as shown by recent actions taken by Scotiabank Trinidad and Tobago.
The bank has progressively increased restrictions on US dollar spending, first by reducing the spending limit on Visa debit cards just over six weeks ago, then eliminating overseas purchases and withdrawals altogether on these cards, and now they are planning to lower US dollar limits on credit cards.
These measures reflect a larger issue with foreign currency availability in T&T and have a crippling effect on citizens who want to travel but more so on individuals who have to conduct business abroad.
Businesses and individuals are finding it increasingly difficult to access US dollars, affecting everything from imports to overseas education, purchasing goods and travel expenses.
The situation seems to show worrying similarities to the economic struggles faced by Venezuela in their early stages of their economic crisis, where severe forex shortages, currency devaluation, and economic mismanagement under government policies have caused inflation, reduced purchasing power, and reduced access to crucial goods and services.
Under the PNM government, T&T’s forex woes are out of control and everyone is concerned about the country’s economic course.
While the government has made excuses saying external pressures such as oil and gas revenue volatility is the major cause of the forex shortages, there is slamming condemnation that policy decisions have not stabilised the currency situation and this government is incapable of finding alternative solutions for the forex shortage.
With forex access so difficult to attain, there is growing concern that T&T may face a deepening crisis, where trade limitations, inflation, and a dwindling standard of living could be similar to the economic conditions seen in Venezuela.
The simple fact that no one wants to admit is that our currency is artificially overpriced. Artificially overpricing a currency against the USD often leads to reduced exports, increased imports, foreign exchange shortages, inflation, decreased foreign investment, and a likelihood of a debt crisis. In the long term, these pressures can cause economic instability and a loss of confidence in the country’s financial system.
Without steps to improve the forex shortage, the risk of a prolonged foreign exchange crisis and broader economic instability can lead us down a slippery slope similar to Venezuela which no citizen wants to see.
We therefore must look to remove this government from office now, ten years have been long enough to lead us down this path of failure and we must look to put in the only viable alternative, the United National Congress.
Neil Gosine is an insurance executive, sometimes a temporary Opposition Senator, an ex-treasurer of the UNC and a former chairman of the National Petroleum Marketing Company of Trinidad and Tobago (NP). 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
Forex Issue can Make T&T like Venezuela
TRINIDAD and Tobago’s foreign exchange (forex) challenges have become increasingly obvious, as shown by recent actions taken by Scotiabank Trinidad and Tobago.
The bank has progressively increased restrictions on US dollar spending, first by reducing the spending limit on Visa debit cards just over six weeks ago, then eliminating overseas purchases and withdrawals altogether on these cards, and now they are planning to lower US dollar limits on credit cards.
These measures reflect a larger issue with foreign currency availability in T&T and have a crippling effect on citizens who want to travel but more so on individuals who have to conduct business abroad.
Businesses and individuals are finding it increasingly difficult to access US dollars, affecting everything from imports to overseas education, purchasing goods and travel expenses.
The situation seems to show worrying similarities to the economic struggles faced by Venezuela in their early stages of their economic crisis, where severe forex shortages, currency devaluation, and economic mismanagement under government policies have caused inflation, reduced purchasing power, and reduced access to crucial goods and services.
Under the PNM government, T&T’s forex woes are out of control and everyone is concerned about the country’s economic course.
While the government has made excuses saying external pressures such as oil and gas revenue volatility is the major cause of the forex shortages, there is slamming condemnation that policy decisions have not stabilised the currency situation and this government is incapable of finding alternative solutions for the forex shortage.
With forex access so difficult to attain, there is growing concern that T&T may face a deepening crisis, where trade limitations, inflation, and a dwindling standard of living could be similar to the economic conditions seen in Venezuela.
The simple fact that no one wants to admit is that our currency is artificially overpriced. Artificially overpricing a currency against the USD often leads to reduced exports, increased imports, foreign exchange shortages, inflation, decreased foreign investment, and a likelihood of a debt crisis. In the long term, these pressures can cause economic instability and a loss of confidence in the country’s financial system.
Without steps to improve the forex shortage, the risk of a prolonged foreign exchange crisis and broader economic instability can lead us down a slippery slope similar to Venezuela which no citizen wants to see.
We therefore must look to remove this government from office now, ten years have been long enough to lead us down this path of failure and we must look to put in the only viable alternative, the United National Congress.
Neil Gosine is an insurance executive, sometimes a temporary Opposition Senator, an ex-treasurer of the UNC and a former chairman of the National Petroleum Marketing Company of Trinidad and Tobago (NP). 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