Aleem Khan

T&T's net for­eign re­serves have hit a record high, RBC Caribbean Group Econ­o­mist Mar­la Dukha­ran said in her lat­est RBC Caribbean Eco­nom­ic Re­port. She cit­ed on­line da­ta from the Cen­tral Bank which showed that net for­eign re­serves reached US$10.36 bil­lion in April–the high­est lev­el ever–which equates to just over 12 months of im­port cov­er.Com­ment­ing on the price of the TT dol­lar ver­sus the US dol­lar Dukha­ran said: "On March 17, the TT dol­lar reached its weak­est lev­el ever rel­a­tive to the US dol­lar, at TT$6.4686 to US$1, ac­cord­ing to the CBTT. Then on June 16, the TT dol­lar ap­pre­ci­at­ed to its strongest lev­el rel­a­tive to the US dol­lar since No­vem­ber 15, 2010, at TT$6.366 to US$1."

She said this rep­re­sent­ed a TT dol­lar ap­pre­ci­a­tion of 1.63 per cent against the US dol­lar, com­pared to the March 17 all time low.The fig­ures have been re­leased in the wake of for­eign ex­change dis­tri­b­u­tion prob­lems which re­sult­ed in many lo­cal dis­trib­u­tors be­ing un­able to set­tle their debts to their over­seas sup­pli­ers for sev­er­al months.Fi­nance Min­is­ter Lar­ry Howai re­peat­ed­ly de­nied there was a for­eign ex­change cri­sis. The prob­lem was blamed on a change in the dis­tri­b­u­tion sys­tem where 90 per cent of the avail­able for­eign ex­change was auc­tioned to 12 for­eign ex­change deal­ers. That sys­tem has since been changed and Cen­tral Bank of­fi­cials said there will be an eas­ing of the prob­lem.

Dukha­ran's re­port, which al­so high­light­ed fi­nan­cial is­sues in the wider Caribbean, al­so dealt with the East­ern Caribbean Cen­tral Bank's (EC­CB's) for­eign re­serves which have been ris­ing steadi­ly, and are pro­ject­ed to grow from an es­ti­mat­ed US$1.17 bil­lion in 2013 (or 4.5 months of im­port cov­er) to US$1.21 bil­lion this year (4.6 months of im­port cov­er).The econ­o­mist al­so re­port­ed on the June 27-28 vis­it to Ja­maica by IMF man­ag­ing di­rec­tor Chris­tine La­garde who an­nounced that "the coun­try has made some hard choic­es to get growth high­er and debt low­er."

While Ja­maica im­ple­ment­ed dif­fi­cult mea­sures, it tried to spread the bur­den across so­ci­ety, the re­port quot­ed La­garde as say­ing. While the gov­ern­ment was cut­ting spend­ing, it was do­ing its best to pro­tect the most vul­ner­a­ble–rais­ing cash trans­fers for poor house­holds by 67 per cent for the el­der­ly and 15 per cent for oth­ers last year, with an­oth­er 15 per cent in­crease planned for Oc­to­ber."Pub­lic fi­nances are health­i­er and growth has re­turned," La­garde said. The RBC an­a­lyst quot­ed La­garde as say­ing that "Ja­maica has con­sis­tent­ly met its tar­gets un­der the IMF pro­gramme."