One of the interesting things about travelling outside of this country on vacation is that it is always possible to discover things about T&T and the world.
In London last Thursday, lahaying through Harrods, eyes fell upon a carefully lit bowl of cherries, sitting in the fruit kiosk in the middle of the ground floor of the upscale British department store located in Knightsbridge, London. The presentation of the cherries was as good as a sign that said, ‘Devour me.’
Since I had been looking for temperate cherries and peaches in London, I asked the shop assistant, “What’s the price of those cherries?”
“It’s £150 a kilo,” he answered.
“Excuse me?” I responded in shock, certain that I must have misheard his clearly delivered answer.
He repeated the answer, adding helpfully, “It works out to be about £1 per cherry.”
Later that day, I popped into a small Marks & Spencer (M&S Food) store and saw cherries from Chile for sale at £3.30 for 200 grammes, which is one-fifth of a kilogramme.
Harrods was selling cherries at £30 for 200 grammes that were available at a mid-range store for close to 10 per cent of the price. It is quite likely the Harrods cherries also originated from Chile.
Was I prepared to pay Harrods TT$270 (£30) for 200 grammes of cherries or £150 (TT$1,350) for a kilogramme of the fruit?
Devour me not!
But was I prepared to pay TT$29.70 (£3.30) for 200 grammes of cherries?
That story is not meant to question the sanity of Harrods, or the people who shop there, but to illustrate the point that most Trinidadians who shop overseas automatically convert the prices they see in foreign countries using the price they paid for the foreign currency, especially when doing cash transactions.
The price of sterling from the banks it was purchased from was TT$9 to £1. At both of the bureaux de change at Piarco, sterling was sold at TT$11.30 to £1.
Last Friday at Gatwick Airport, I walked passed a Bureau de Change located in the waiting/shopping/eating area after the security checks.
The initial inquiry was about converting a small amount of euro to sterling. But there was a £5 commission added to the conversion amount that I was looking to transact.
But then, flashing on the electronic billboard in the Bureau de Change, I saw Trinidad and Tobago (as well as Jamaica and Barbados).
That led to an inquiry of the sales agent whether she was willing to accept TT dollars to buy sterling.
She confirmed that she was and quoted a price of TT$10 to £1, with no commission, which was higher than the TT$9 to £1 paid at local banks, but lower than TT$11.30 to £1 quoted at the Piarco International Airport bureaux de change.
The possibility of converting TT dollars into sterling at a Gatwick Airport Bureau de Change was confusing because of the assumption that our local currency was not available for conversion anywhere outside of T&T.
As far as I am aware, the official Central Bank position is that the “TT dollar is an official national currency and used only in Trinidad and Tobago,” as outlined by the worlddata.info website.
The question: “Is the TT dollar convertible anywhere outside of T&T” was asked of the official Central Bank spokesperson by WhatsApp on Tuesday morning.
Although the spokesperson read the message on Tuesday afternoon, there was no response to the question by Wednesday morning; not even to acknowledge receipt.
It seems to me, though, that T&T’s Central Bank and the Ministry of Finance have been attempting to reduce the avenues for the conversion of the TT dollar outside of the country.
In November last year, the Bank of Jamaica, that country’s central bank, issued a notice that the existing arrangement for the BOJ to repatriate T&T banknotes was under review and that, effective November 6, 2023, the exchange of TT dollars at the Jamaican financial institution’s banking counter was suspended until further advised.
Then, on November 6, 2023, the BOJ issued a notice clarifying that the suspension of the banknote exchange arrangement was “due to the fact that the Central Bank of T&T (CBTT), to which this currency is repatriated, has suspended the arrangements for the repatriation of TT dollars until further advised.”
On November 8, 2023, the CBTT in a statement, confirmed that the central banks in the Caribbean region “have a long-standing arrangement to redeem each other’s currency,” which meant for example, “that the CBTT will periodically send to the Bank of Jamaica the Jamaican dollars (J$) the CBTT may have collected over time. In turn the BOJ will credit the CBTT’s account with the equivalent in US$. This arrangement is reciprocal and has worked well.”
The Central Bank of T&T said the amounts collected and exchanged were “generally small” and that these and other currency arrangements were “constantly being reviewed and discussed among the staffs of the banking departments of the various central banks.
“This is, among other things, to keep up with new technological developments, streamline operations including towards reducing the costs associated with repatriating banknotes, and staving off potential avenues for money laundering and other criminal activities.”
The Central Bank of T&T’s statement added that in the particular case, “the BOJ and CBTT staff considered that it would be appropriate to have the BOJ suspend its over-the-counter public exchanges of TT$. This is in line with the current CBTT practice of not engaging in such exchanges with the public, either for J$ or any other currency.”
So, it seems to me, the CBTT has stopped “a long-standing arrangement” that allowed the exchange of regional currencies. But that the arrangement with the BOJ was suspended as this was “in line with the current CBTT practice of not engaging in such exchanges with the public, either for J$ or any other currency.”
That struck me then, and strikes me now, as being an attempt to stop the leakage of US dollars out of the country (the conversion of TT dollars into mostly US dollars) because when the BOJ collects TT dollars in Jamaica, that money has to be credited to the Jamaican central bank in US dollars.
If there was a spike in the amount of TT dollars being submitted to the BOJ, which would have resulted in a call on the CBTT’s holdings of US dollars, that may have been cause for concern at the Ministry of Finance and the Central Bank.
There is another “live” issue regarding the access of regional residents to the appropriate payments for goods and services delivered to T&T residents.
At the beginning of March, Prime Minister of St Vincent and the Grenadines, Ralph Gonsalves, complained on a Vincentian radio station that market vendors there were still having problems receiving payment in Eastern Caribbean dollars for market goods sold here.
On radio, Prime Minister Gonsalves read from a letter he had addressed to Prime Minister Rowley that, “on November 22, 2023, the Central Bank of Trinidad and Tobago informed the Eastern Caribbean Central Bank that the arrangements to assist small traders from our country will cease on December 31, 2023 and will not be renewed.”
In the letter to Dr Rowley, Prime Minister Gonsalves noted that T&T exports in excess of US$70 million annually to St Vincent and the Grenadines and has “a substantial trade imbalance” with T&T. That sounds to me like an implicit threat to slow down the payment of T&T exports to St Vincent. But I could be wrong.
So in the fourth quarter of 2023, the Central Bank ended long-standing arrangements to facilitate the payments to Vincentian and Jamaican residents that could have involved a small amount of US dollars.
In the fourth quarter, as well, Imbert said new arrangements for preferential access to foreign exchange for qualified small and medium enterprises (SMEs) would be implemented within the next six months, “which should reduce the demand for sales of foreign exchange using credit cards.”
While the country waits for the SME forex facility, which was due by March 31, are TT dollars easily convertible to foreign currencies in Gatwick Airport, on America St in Georgetown...and elsewhere?