In March 2025, the Central Bank of T&T began issuing its Economic DataPack, which replaced its Economic Bulletin and Summary Economic Indicators Bulletin. The DataPack is published quarterly along with the Monetary Policy Announcement and the initiative forms part of the Bank’s ongoing efforts to improve the accessibility and usefulness of economic and financial data sets.
The December 2025 Economic DataPack indicates that T&T’s net official foreign reserves at the end of November 2025, totalled US$4.878 billion, which was equal to 5.7 months of import cover.
T&T’s net official foreign reserves at the end of November 2023 amounted to US$6.268 billion or 7.8 months of import cover. That means in the two-year period, the country’s foreign reserves declined by US$1.390 billion, or 22.17 per cent.
That two-year snapshot indicates the average annual depletion rate of T&T’s foreign reserves was US$695 million or by about 11 per cent.
This country’s net official foreign reserve assets comprise monetary gold, foreign exchange, special drawing rights (SDR) and T&T’s reserve tranche position with the International Monetary Fund (IMF).
Of T&T’s US$4.878 billion in net official foreign reserves at the end of November 2025, T&T’s IMF holdings of SDRs accounted for US$1.065 billion, gold reserves for US$267.1 million, the IMF reserve tranche for US$166.1 million, with the balance being holdings of foreign exchange.
Put another way, T&T’s holdings of foreign exchange totalled US$3.380 billion at the end of November 2025 and its holdings of gold and the two IMF reserve assets amounted to US$1.498.3 billion. That means the Central Bank’s holdings of foreign exchange account for 69.29 per cent of its net official foreign reserves and its holdings of gold and the IMF reserve assets total 30.71 per cent of the country’s official foreign reserves.
(Please see definitions of SDRs and the IMF reserve tranche in sidebar)
Since there is no evidence that the Central Bank has sold its holdings of gold or its IMF reserve assets recently, one must assume that when the Bank intervenes in the foreign exchange market to sell foreign exchange to authorised dealers, it does so using its foreign currency holdings.
It is fairly well known that the Central Bank intervenes in the domestic foreign exchange market to the tune of about US$100 million a month or US$1.2 billion a year.
In short, that means the Central Bank sells about US$1.2 billion annually to support the market and address the net foreign exchange sales gap, which is the difference between the demand for foreign exchange and the supply of it at the authorised dealers.
The Central Bank’s latest reading of the T&T foreign exchange market is presented in its November Monetary Policy Report (MPR). That report indicates that demand for foreign exchange—the sales of foreign exchange by authorised dealers to the public—totalled US$4.628 billion from January to October 2025.
The supply of foreign exchange—the purchases of foreign exchange by authorised dealers from the public—in the period from January to October 2025 amounted to US$3.354 bilion.
That resulted in a net sales gap—the difference between the demand for and the supply of foreign exchange—of US$1.274 billion in the 10-month period.
“To support the market, the Central Bank sold US$1.087 billion to authorised dealers,” which averages about US$108 million a month for the period, according to the November MPR.
So, if the foreign exchange portion of T&T’s net official foreign reserves amounted to US$3.380 billion at the end of November 2025, and the Central Bank depletes those reserves by about US$1.2 billion a year from sales by selling to authorised dealers, what does that mean for the reserves?
The Government replenishes the net official foreign reserves mainly by:
* Withdrawing foreign exchange from the Heritage and Stabilisation Fund, whose net asset value totalled an estimated US$6.3 billion at the end of September 2025;
* Borrowing foreign exchange, either from the international capital markets or from international financial institutions such as the Development Bank of Latin America and the Caribbean (CAF), which also provides grants to T&T. By my calculations, T&T’s external debt was about US$5.46 billion at the end of September 2025, according to the December 2025 Economic DataPack;
* The Government also accesses dividends from state enterprises such as Heritage Petroleum and the National Gas Company.
So, T&T’s net official foreign reserves are NOT being depleted by US$1.2 billion a year. As reported earlier in this piece, the reserves declined by US$1.390 billion over the two years to the end of November 2025, which is about US$695 million a year.
But if T&T continues to deplete net official foreign reserves at the current rate of US$695 million a year, the foreign exchange aspect of the country’s reserves would decline to US$1.99 billion by November 2027. That is US$3.380 billion minus US$1.390 billion.
And if US$4.878 billion of net official foreign reserves equals 5.7 months of import cover, and reserves are being depleted by US$57.91 million a month (which is simply US$695 million divided by 12), then by November 2027, T&T would have 2.33 months of net official foreign reserves, all things being equal.
It is noteworthy that in December, the rating agency Moody’s revised its outlook on T&T to negative from stable, based on rising external vulnerability, “as liquid foreign exchange reserves have fallen by 24 per cent over the past year to $3.2 billion as of August 2025.” That fall in liquid reserves, according to Moody’s “has intensified foreign exchange shortages and reduced coverage of upcoming external debt payments.”
The rating agency also opined, “The government’s ability to prevent further erosion of reserves and maintain the stability of the currency peg will hinge on the effectiveness of other announced initiatives, including transfer pricing legislation.”
Asked last month to respond to the Moody’s report, Central Bank Governor, Larry Howai, said, “We have a number of initiatives in place to address the areas of concern. I understand Moody’s emphasis on liquid reserves but it’s not absolutely accurate. As you know our SDR holdings can be liquidated if we need to, subject to a relatively nominal interest cost. We’ll probably make a more detailed statement early in the new year.”
It was put to Mr Howai that if T&T were to liquidate its SDR holdings, that would indicate the country was in an EXTREMELY DIRE situation…unable to service its foreign debt or to pay for imports in a timely fashion?
Mr Howai responded, “We hold surplus SDRs so we would do that first, but yes that would not be our first option. I was just trying to point out that it does provide a liquidity option of which some persons may not be aware based on the way the rating advisory was phrased.”
What is an SDR?
SDRs are international reserve assets created by the International Monetary Fund (IMF) to enhance global liquidity and supplement the official reserves of its member countries. They serve as a potential claim on the freely usable currencies of IMF member countries, providing liquidity during times of economic distress. SDRs are not a currency but rather an asset that can be exchanged among member countries to bolster their foreign exchange reserves.
What is a reserve tranche?
According to an Investopedia definition, a reserve tranche is a portion of the required quota of currency each member country must provide to the International Monetary Fund (IMF). The reserve tranche can be utilized by the individual country for its own purposes—without a service fee or economic reform conditions. According to the IMF, the reserve tranche is about one-quarter of a member nation’s quota. This reserve tranche can be used for different purposes, including balance of payments.
