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Tuesday, July 22, 2025

T&T Chamber president: Give new forex system time to work

by

20140604

Pres­i­dent of the T&T Cham­ber of In­dus­try and Com­merce Mooni­lal Lalchan is of the view the new sys­tem of al­lo­cat­ing for­eign ex­change in­tro­duced by the Cen­tral Bank ear­li­er this year must be giv­en time to work.Lalchan made the com­ment ahead of to­mor­row's break­fast meet­ing host­ed by the Cham­ber at which the Bankers' As­so­ci­a­tion of T&T (BATT) pres­i­dent Lar­ry Nath, Cen­tral Bank Gov­er­nor Jwala Ram­bar­ran and oth­er stake­hold­ers will dis­cuss is­sues af­fect­ing the for­eign ex­change sys­tem.

Un­der the new for­eign ex­change al­lo­ca­tion sys­tem, in­stead of 50 per cent of the to­tal amount of US dol­lars from the Cen­tral Bank be­ing auc­tioned among com­mer­cial banks, 90 per cent of US dol­lars are be­ing auc­tioned among 12 li­censed for­eign ex­change deal­ers. How­ev­er, busi­ness peo­ple have been com­plain­ing about prob­lems with the sup­ply of US cur­ren­cy on the lo­cal mar­ket.

The Cen­tral Bank last week in­ject­ed US$200 mil­lion in­to the for­eign ex­change sys­tem but this has not ful­ly al­le­vi­at­ed the prob­lem.Yes­ter­day, in an in­ter­view with the T&T Guardian, Lalchan said: "What has hap­pened in the last cou­ple weeks is that they have re­viewed it and I know they have made some ad­just­ments. It is all about find­ing out what is work­ing and what is not work­ing, then mak­ing the nec­es­sary changes.

"This came about be­cause there was an out­cry about the al­lo­ca­tion and whether or not it was trans­par­ent. I would sug­gest we con­tin­ue to mon­i­tor it. The Cen­tral Bank I be­lieve is do­ing the right thing in try­ing to get to the bot­tom of it."Lalchan said trans­ac­tions done by in­di­vid­u­als us­ing US dol­lars are al­so dri­ving up de­mand.

"The amount of shop­ping that is be­ing done on­line, once you buy things with cred­it cards out there the bank has to set­tle that in for­eign ex­change and that is eat­ing up a sub­stan­tial amount of for­eign ex­change. Not nec­es­sar­i­ly does some­one have to buy for­eign ex­change over the counter to pay for goods and ser­vices. That set­tle­ment takes pri­or­i­ty over busi­ness­es be­cause you have to set­tle bank to bank."

Nath agreed there was need to give the sys­tem a chance to work. He re­it­er­at­ed that there is no short­age of US cur­ren­cy since "from a macro per­spec­tive our re­serves are very ro­bust, there is ap­prox­i­mate­ly 12 months of cov­er"."BATT has had meet­ings with the Cen­tral Bank. The Cen­tral Bank has tak­en some of our sug­ges­tions on board and amend­ments have been made. We are fol­low­ing to see the im­pact on the dis­tri­b­u­tion and on the mar­ket," he said.

Nath said "kinks" in the new sys­tem may be ad­dressed with the rec­om­men­da­tions BATT made to the Cen­tral Bank.The Cen­tral Bank is ex­pect­ed to make an­oth­er in­jec­tion of US dol­lars in­to the sys­tem this week.The theme of to­mor­row's break­fast meet­ing Trinidad and To­ba­go For­eign Ex­change Pol­i­cy and the Im­pli­ca­tions for Busi­ness and Eco­nom­ic Growth. It takes place at the Leon Agos­ti­ni Con­fer­ence Hall, Cham­ber Build­ing, West­moor­ings from 8 am to 10.30 am.

Dur­ing the meet­ing, Ram­bar­ran and Nath will give in­for­ma­tion on the Cen­tral Bank's pol­i­cy and its role in sup­ply­ing for­eign ex­change to com­mer­cial banks, as well as the ways in which the flow of for­eign ex­change from banks to busi­ness can be im­proved.


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