Demand for foreign currency continues to outstrip supply. As a result, the Central Bank yesterday announced that it had sold US$250 million to the banking system to offset a US$154 million shortfall recorded last month.Data from the Central Bank shows that the demand for foreign exchange from the business community and public totalled US$592 million last month, while the supply of foreign exchange, mainly from energy companies, amounted to US$438 million.
The Central Bank said its latest cash injection is in keeping with its strategic foreign exchange management programme, "completely offsetting the gap and providing just over US$95 million in excess supply to be used in early March 2015."
The bank said in a press release: "Conversions by the energy sector contributed 71 per cent or US$310 million to total foreign exchange inflows for February 2015. Demand was mainly driven by the retail and distribution (US$141 million), manufacturing (US$38 million), and automobile (US$19 million) sectors. Net credit card sales amounted to US$19 million."T&T's net official reserves currently stand at US$10.7 billion–one year worth of import cover.
In the Central Bank's Annual Report for 2014 which was released late last week, Governor Jwala Rambarran said changes were made the foreign exchange distribution system last year based on analysis of the market over the 20-year period since the market was liberalized."The improvements were introduced to re-align the Bank's foreign exchange distribution system to match expanding imbalances in the domestic foreign exchange market," he said.