Nadaleen Singh

Busi­ness­men say prob­lems with the sup­ply of US cur­ren­cy have not eased al­though the Cen­tral Bank in­ject­ed US$200 mil­lion in­to the mar­ket last week.Two groups, the Ship­ping As­so­ci­a­tion of T&T (SATT) and the Ch­agua­nas Cham­ber of In­dus­try and Com­merce, told the T&T Guardian yes­ter­day that their mem­bers con­tin­ue to be frus­trat­ed in their ef­forts to se­cure ad­e­quate amounts of US cur­ren­cy for their busi­ness op­er­a­tions.

The Ship­ping As­so­ci­a­tion said the sit­u­a­tion is now at a chron­ic stage."It is too ear­ly to as­sess the an­tic­i­pat­ed im­pact (of the in­jec­tion), but SATT mem­bers con­tin­ue to reel from the height­ened lev­el of ad­min­is­tra­tion re­quired to deal with what they now con­sid­er to be a cri­sis," the group said, adding that low sup­ply is dri­ving up the price of the US dol­lar."One ship­ping agent has in­di­cat­ed that his com­pa­ny will now be us­ing an ex­change rate of TT$6.55 for trans­ac­tions with con­signees as this is the rate their bank is charg­ing them to ob­tain the amount of US re­quest­ed. Oth­ers have re­sort­ed to pur­chas­ing Cana­di­an dol­lars then chang­ing it to US dol­lars, ef­fec­tive­ly de­valu­ing the TT dol­lar."

SATT is call­ing for a re­view of the Cen­tral Bank's new dis­tri­b­u­tion pro­to­col or a re­turn to the for­mer pro­to­col.The Ch­agua­nas Cham­ber wants lo­cal fi­nan­cial in­sti­tu­tions to ex­plain why there is an ap­par­ent short­age in sup­ply of for­eign cur­ren­cy and "why busi­ness­men are con­tin­u­ing to be un­able to ac­cess suf­fi­cient fund­ing."The Cham­ber said it is "dis­ap­point­ing that af­ter queu­ing in line for more than an hour, busi­ness­men are told that the trans­ac­tion can­not be con­clud­ed due to the un­avail­abil­i­ty of for­eign cur­ren­cy.""Most busi­ness­men have to opt for much lessor sums of mon­ey, in­vari­ably af­fect­ing their cred­it rat­ing with sup­pli­ers in the US and as far as Chi­na," the group said."It is pub­lic knowl­edge that T&T has in ex­cess of US $10 bil­lion sur­plus in­clu­sive of the HSF (Her­itage Sta­bil­i­sa­tion Fund) which is suf­fi­cient for more than one year im­port cov­er, there­fore the sup­ply can meet the de­mand."

The group quot­ed a state­ment by the In­ter­na­tion­al Mon­e­tary Fund in­di­cat­ing that the coun­try's ex­ter­nal po­si­tion re­mains healthy."In­creas­es in for­eign ex­change in­flows may soon help to al­le­vi­ate short­ages, al­though some un­cer­tain­ty about the avail­abil­i­ty of for­eign ex­change may be pro­vid­ing an in­cen­tive to hold larg­er than usu­al cash bal­ances in for­eign cur­ren­cy," the Cham­ber said. The group said it looks for­ward to see­ing the im­pact of a new sys­tem of al­lo­cat­ing for­eign ex­change in­tro­duced on April 1. It is call­ing on the Cen­tral Bank to con­sid­er mov­ing to­wards a more flex­i­ble, mar­ket-clear­ing sys­tem if "sig­nif­i­cant unan­tic­i­pat­ed short­falls re­cur." Cen­tral Bank Gov­er­nor Jwala Ram­bar­ran, speak­ing at a Mon­e­tary Pol­i­cy Fo­rum in To­ba­go last week, said in the last two decades, de­mand for for­eign ex­change has in­creased and its com­po­si­tion changed to re­flect new pat­terns of con­sumer spend­ing.

He said last year the sup­ply of for­eign ex­change al­most tripled to $US5.8 bil­lion and the Cen­tral Bank in­ter­vened with in­creased vol­umes of for­eign ex­change to quell ex­cess de­mand pres­sures.Ram­bar­ran said In 1993 the Cen­tral Bank sold a $US33 mil­lion. This in­creased to al­most $US500 mil­lion by 2003 and last year it sold $US1.7 bil­lion to the bank­ing sys­tem.

For the first five months of this year, the Cen­tral Bank sold US$610 mil­lion to the fi­nan­cial sys­tem.