Central Bank injects another US$75m into the market

In response to complaints yesterday from the T&T Manufacturers Association of T&T that some of its members still had problems accessing US currency, the Central Bank of T&T (CBTT) has made another injection of US $75 million into the market. The TTMA had called on the CBTT, the Ministry of Finance and the banking and financial institutions to work together to fix the problem. In a statement yesterday, the CBTT said: “As part of its scheduled foreign exchange intervention programme, CBTT will sell US$75 million to the banking system today. The timing of this sale is based on the bank’s ongoing analysis of market conditions and consultation earlier this week with foreign exchange traders. This intervention comes 15 days after the bank sold US$100 million to the system on July 2. The total sale of foreign exchange by Central Bank for July 2014, thus far, is US$175 million.”

The bank expects to make more injections of US currency in the future. “In the first half of July, inflows of US currency have been low, as expected, given the rate of foreign exchange conversions by energy companies. We anticipate this trend to continue in the latter part of July and into August. The Central Bank is, therefore, expected to continue to provide support to the foreign exchange market, injecting more US currency into the system within the next few weeks.” Asked how much of a problem is the short in supply to the economy, Vasant Bharath, Trade, Investment and Communications Minister yesterday said: “I am not aware of the extent, apart from the fact that I did notice this morning a comment from the TTMA. I intend to bring it up at Cabinet. Clearly, we had expected that, with what the Governor of the Central Bank had put in place, that these matters would have been resolved. Clearly, that is not the issue.”

Bharath was speaking to reporters yesterday following the conference, “Crisis Communication, Transforming PR crises into Opportunities,” which was held at the Hilton Trinidad Hotel and Conference Centre, St Ann’s. He added that the Government is aware the issue is “a widespread and prevalent issue, it will not just be limited to manufacturers only.” According to the CBTT, the total US currency sold by Central Bank to authorised dealers for the year is “US$865 million, US$210 million higher than the amount sold for the corresponding period in 2013. At the end of June 2014, T&T’s net official reserves stood at US$10,304 million, representing an excess of 12 months of import cover.”