Last update: 31-Jul-2014 6:00 pm
Thursday, July 31, 2014
Trinidad & Tobago Guardian Online
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No risk of devaluation: Howai
Finance Minister Larry Howai has assured that there is no risk of any devaluation of the T&T dollar.
Responding to comments by the Opposition earlier, Howai, in a statement, said the “economy remains robust and the country’s foreign exchange reserves are at a record high US$10.3 billion or over 12 months of import cover. The international benchmark is three months of import cover. All indicators point to the fact that the economy is on solid footing. Unemployment is low, inflation has been subdued and government revenues are better than projected.
“Regarding the foreign exchange market, the Central Bank, under the leadership of Governor Jwala Rambarran, has instituted a new system of managing the process. As with all newly established systems there has been some negative reaction and some initial administrative problems. It must be emphasised also that this new auction system is a controlled one which seeks to ensure that there is no disadvantage to small and medium businesses. The Central Bank of T&T continues to monitor the new system and will make adjustments as they believe necessary. We are aware of the problems faced by local businesses and are confident that the matter will be sorted out soon,” the statement said.
Howai referred to recent statements made by the World Bank, Standard & Poors, Moody’s, the IMF and Business Monitor International which he said had all confirmed that the economy continued to perform strongly. The Economist Intelligence Unit recently confirmed the strength of the country’s reserve position and concurred with the government that there is little risk of a devaluation.
The Heritage and Stabilisation Fund stands at over US$5 billion and the US dollar deposits in the banking system exceed US$3 billion. The balance of payments remains positive amounting to an estimated US$786 million last year and is expected to increase in 2014. Foreign direct investment is also projected to increase to over US$2 billion this year.
Further, the energy sector, which attracts some 85 per cent of T&T’s foreign exchange earnings, has returned to growth, and the price of oil and gas remains firm.
These are all factors which confirm the strength of the country’s exchange position, the statement said.