GEISHA KOWLESSAR ALONZO
The foreign exchange market in T&T, as monitored and regulated by the Central Bank, serves as a vital barometer of the nation’s economic health and international engagement.
Through its oversight of authorised dealers, the Central Bank facilitates the sale and purchase of foreign currency across a wide array of sectors, each reflecting distinct patterns of demand.
The bank uses these dealers to intervene in the market by selling foreign currency to them to help meet demand.
Data provided by the Central Bank Governor Larry Howai at a media engagement on September 4, 2025 offered a valuable insight into the sale and demand for foreign currency by various sectors of the economy.
This analysis dissected the figures from 2015 to 2024 to identify overarching economic trends, sectoral performance and the underlying drivers of foreign exchange transactions.
In his presentation the Governor noted, showed slides detailing sales of foreign currency by authorised dealers to the public 2015 to 2024 (US$million) and purchases of foreign currency by authorised dealers from the public 2015 to 2024 (US$million).
The use of foreign exchange to pay foreign currency credit card bills more than tripled between 2015 and 2024, according to data presented by Central Bank Governor, Larry Howai at last Thursday’s news conference.
Howai presented a slide during his initial delivery, which indicated that in 2015, authorised dealers of foreign exchange sold US$765.5 million to credit card centres to pay for foreign purchases, travel, education and other expenses.
By 2024, authorised dealers sold US$2.31 billion to credit card centres, an increase of 202 per cent for the 10-year period and more than triple the amount 10 years earlier. The significant increase in the use of foreign exchange to pay US-dollar credit card bills, and fees to credit card companies, has been noted in Cental Bank reports and by Government officials, including former minister of finance Colm Imbert.
Last year, credit cards accounted for 39.3 per cent of the total sales by authorised dealers to the public, making credit card payments the largest user of foreign exchange in in T&T in 2024. In 2015, only 10.4 per cent of foreign exchange sales to the public were to pay credit card bills. Ten years ago credit card usage of foreign exchange was second behind the retail and distribution sector.
This trend perhaps points to a big change in how consumers behave and shows that the local economy is becoming more connected to international online shopping and travel.
On the other hand, sales of foreign exchange to the retail and distribution sector, which was a major source of demand in 2015, dropped by 51.4 per cent from US$1.77 billion in 2015 to US$861.4 million in 2024.
Similarly, the manufacturing sector experienced a sharp drop in the sale of foreign exchange, falling from US$770.2 million in 2015 to US$239.9 million in 2024.
T&T’s energy sector continues to plays a pivotal role in the country’s foreign exchange ecosystem.
From the outset, it’s clear that energy companies are overwhelmingly net suppliers of foreign currency.
In 2015, purchases from the public by authorised dealers—essentially the foreign exchange provided by energy firms—stood at a substantial US$3.36 billion.
In contrast, the sales by authorised dealers of foreign exchange to energy companies increased from US$129.5 million in 2015 to US$565.7 million in 2019, reflecting the closure of the Petrotrin refinery and the establishment of Paria Fuel Trading as the supplier of fuels to the local and regional markets. By 2024, sales of foreign exchange to energy companies, mostly Paria, totalled US$823.6 million by 2024.
This pattern of high purchases and relatively low sales persisted throughout the decade, underscoring the sector’s role as the backbone of T&T’s forex inflows.
However, the trajectory of these figures is far from static.
Purchases declined sharply falling to US$2.16 billion in 2017, before rebounding to US$2.69 billion in 2019.
The most dramatic drop occurred in 2020, when purchases from energy companies fell to US$1.92 billion—likely a direct consequence of the global pandemic, which disrupted energy markets, reduced demand and depressed prices.
Yet the sector demonstrated resilience: by 2021, purchases surged to US$2.97 billion, and in 2022, they peaked at US$4.09 billion, the highest in the ten-year span.
Forex sales and purchases both decline
Between 2015 and 2024, total foreign currency sales by authorised dealers to the public declined by 20 per cent from US$7.38 billion to US$5.89 billion, while purchases from the public declined by 7.8 per cent from US$4.93 billion to US$4.54 billion.
While both figures fluctuated over the years, the underlying trend remained consistent: the demand for foreign currency exceeded the supply available through official channels. In 2015, the gap between demand and supply was US$2.45 billion and for 2024, the gaps was US$1.35 billion
The most dramatic dip in both sales and purchases occurred in 2020, coinciding with the global COVID-19 pandemic.
Sales to the public fell to US$4.50 billion, and purchases from the public dropped to US$3.29 billion, perhaps reflecting the contraction in international trade, travel restrictions and reduced consumer activity.
However, the market rebounded in 2021 and 2022, with sales peaking again at US$6.55 billion in 2022 and purchases reaching US$5.53 billion, the highest in the decade. In that year of recovery, the gap between demand and supply of foreign exchange was US$1.02 billion
This recovery was short-lived, as both metrics declined again in 2023 and 2024.
In 2023, total foreign currency sales reached US$6.22 billion, while purchases were US$4.61 billion.
By 2024, both figures declined: sales dropped to US$5.89 billion, and purchases to US$4.54 billion.
Other sectors
Other sectors showed mixed performance.
The services industry demonstrated a declining demand for foreign exchanger, with authorised dealers selling US$229.5 million to the sector in 2015. That dropped to US$54.5 million in 2024.
Financial institutions present a more erratic pattern. In 2015, sales stood at US$167.6 million, and purchases were relatively modest at US$49.3 million. Over the years, sales fluctuated, peaking at US$178.3 million in 2022 before falling to US$79.7 million in 2024.
Purchases followed a similarly volatile path, rising to US$121.4 million in 2023 before collapsing to just US$21.7 million in 2024.
Insurance companies, meanwhile, show a dramatic and sustained decline in both sales and purchases.
In 2015, sales were recorded at US$107.7 million, and purchases at US$57.3 million.
By 2024, sales had fallen to US$60.1 million, and purchases had plummeted to a mere US$2.7 million.
Foreign currency sales to individuals—meaning the amount of forex they bought from authorised dealers—started at US$192.9 million in 2015 and declined sharply over the next few years, reaching a low of US$34.4 million in 2020.
This drop coincided with the COVID-19 pandemic, which restricted travel and reduced international spending.
After 2020, sales rebounded modestly, climbing to US$83.4 million in 2022, but then declined again to US$38.5 million in 2024.
Forex Reserves
In 2015, reserves were relatively high, likely close to the upper end of the scale, around US$10 billion. This period coincided with stronger energy revenues and a more favourable global economic climate.
By 2024,this figure had fallen to around US$6 billion.
This erosion reflects a prolonged period where the demand for foreign currency has consistently outstripped the country’s supply.
Meanwhile, import cover was strong at approximately 12.0 months in 2015 but had fallen to about 8 months by 2024.
Addressing concerns over T&T’s declining foreign exchange reserves, Howai cautioned that continued erosion would pose serious challenges for the country.
He emphasised the nation’s heavy reliance on imports, stating, “Virtually everything we consume is imported. If our reserves keep falling, our ability to bring in essential goods will become increasingly constrained.”
His remarks underscored the urgency of stabilising the reserves to safeguard economic resilience and ensure access to critical supplies.
