By Prior Beharry
FINANCE Minister Colm Imbert says Trinidad and Tobago will not float its dollar as this will cause inflation.
He made the comment in a media release on Sunday after the Guardian reported that the International Monetary Fund (IMF) wanted T&T to end its forex restrictions. This after the public and businessmen have been unable to access forex and many banks have restricted USD spending on their credit cards.
In a statement on Sunday, Imbert summarised the recommendations and demands in the media:
(a)To address difficulties being experienced by companies and individuals in gaining access to foreign exchange, the Government should allow the TT Dollar to float (i.e. devalue), because the IMF says so;
(b)To address a perception of unfair distribution of forex, the Government should get directly involved in the distribution of foreign exchange and not leave it up to the Commercial Banks or the Central Bank
(c) The Government gave in to pressure from businessmen and the Express newspaper to resume the forex window at the EximBank for essential imports.
Imbert stated that the IMF’s recommendation for a more flexible exchange rate is not new, having been suggested as far back as 2012. He recalled that the 2013 IMF Article IV Report on Trinidad and Tobago advised for the exchange rate to fluctuate within a wider band. The then United National Congress (UNC) government, however, did not consider any changes to the exchange rate system at that time.
He said, “However, the reality is that the IMF’s recommendation that the TT Government should allow the TT dollar to float, which would result in an immediate devaluation of the TT Dollar, is not new.
“This recommendation did not appear for the first time in the 2024 IMF Article IV Report, as the Guardian newspaper would have us believe.
“As far back as 2012, the IMF recommended “greater exchange rate flexibility to allow pricing to play a bigger role in equilibrating the market”. This was repeated in the IMF’s 2013 Article IV Report on Trinidad and Tobago, where the IMF reiterated its view that “our exchange rate should be allowed to fluctuate within a wider band”. However, the then UNC Government told the IMF that they were not contemplating changes to the exchange rate system at that time.”
Imbert said, “The present PNM Government has consistently stated since 2015 that it maintains our fixed exchange rate to control inflation, which is now almost the lowest in the world, and it will not impose hardship on the poor and vulnerable by giving into the irrational demands of the Guardian newspaper and other provocateurs that we devalue the dollar.
“All a devaluation will do is cause a massive spike in the cost of living and make everything more expensive. It will not create any additional US dollars for the country or make forex more readily available for ordinary citizens. By pretending that we are subject to the dictates of the IMF, therefore, and constantly pushing its devaluation agenda for the last nine years, the Guardian is doing the population a disservice.”
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