The announcement last week of the decision by the local arm of Canadian-owned, regional banking giant RBC to offer voluntary separation and early retirement packages to specific groups of...
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After Central Bank US$360m injection into system: Jwala puzzled by shortage
Central Bank Governor Jwala Rambarran says there is a “misconception” about the role of the bank in supplying the market with US foreign currency, noting it does not supply 100 per cent of the market’s need. Commenting on complaints from the business community about the current problems in accessing US currency, Rambarran said the Central Bank only supplies the market with 25 per cent of the foreign exchange.
The remainder comes from the private sector, including commercial banks and the energy sector, he told the T&T Guardian. He said the Central Bank has already released US$360 million for the year, so he could not understand why sections of the business community are complaining about the supply of foreign currency at commercial banks.
Rambarran said in a telephone interview, “There is a US$1.3 billion gap between the demand and the supply of foreign exchange and this is where the commercial banks need to step in. We now supply US$1 billion to bridge that gap. “If the system as a whole has funds or is liquid, then it may suggest one or two financial institutions in the system may not have enough funds to meet immediate demands.”
Businesses have been complaining in recent weeks of being unable to access foreign exchange, with some of them pointing out that foreign companies are now cagey about doing business with them because of uncertainty over whether they will be able to pay their bills. The T&T Manufacturers’ Association, Chaguanas Chamber of Commerce, American Chamber, Supermarkets’ Association and Food Distributors Association have all publicly complained about the shortage.
Finance Minister Larry Howai is calling for the Central Bank to meet with the commercial banks in a bid to find out the source of the problem. He said there are more foreign-exchange buyers than sellers in T&T.