Ke­jan Haynes 

Trinidad and To­ba­go’s im­port cov­er has fall­en to its low­est lev­el in decades, de­clin­ing steadi­ly from over eight months cov­er in mid-2023 to just 5.4 months cov­er in Au­gust 2025.

Im­port cov­er mea­sures how many months a coun­try can pay for its im­ports us­ing its ex­ist­ing for­eign ex­change re­serves. 

Ac­cord­ing to sta­tis­tics from the Cen­tral Bank, the coun­try’s for­eign re­serves were suf­fi­cient to cov­er 8.3 months of im­ports in June 2023. Since then, the buffer has erod­ed by near­ly three months, falling each quar­ter to reach its cur­rent low.

The Cen­tral Bank web­site first be­gan pub­lish­ing im­port cov­er da­ta in months in Jan­u­ary 2006, al­though its records ex­tend as far back as 1991. Over the past two decades, the fig­ure has typ­i­cal­ly hov­ered be­tween eight and ten months, with highs reach­ing 12 to 14 months be­tween 2010 and 2011. It first dropped be­low six months in May 2025 and has been steadi­ly de­clin­ing since.

Econ­o­mists of­ten re­gard three months of cov­er as a min­i­mum safe­ty thresh­old, a bench­mark es­tab­lished by the In­ter­na­tion­al Mon­e­tary Fund (IMF).

While Trinidad and To­ba­go’s re­serves re­main above that crit­i­cal line, the con­tin­u­ing down­ward trend could sig­nal a tight­en­ing of the coun­try’s ex­ter­nal po­si­tion. Cen­tral Bank da­ta show that to­tal net of­fi­cial re­serves de­clined from US$6.6 bil­lion in June 2023 to US$4.6 bil­lion in Au­gust 2025. By com­par­i­son, the im­port cov­er fell from 8.3 months to 5.4 months over the same pe­ri­od.

In Sep­tem­ber, S&P Glob­al Rat­ings re­vised Trinidad and To­ba­go’s out­look to neg­a­tive from sta­ble, cit­ing the grad­ual ero­sion of its fis­cal and ex­ter­nal buffers and lim­it­ed progress in boost­ing growth or im­prov­ing fis­cal man­age­ment. The agency af­firmed the coun­try’s 'BBB-' long-term cred­it rat­ing but warned that con­tin­ued weak­ness could lead to a down­grade with­out time­ly pol­i­cy ac­tion to strength­en pub­lic fi­nances and en­sure bal­anced growth. It al­so not­ed that per­sis­tent U.S. dol­lar short­ages, linked to the long-stand­ing qua­si-fixed ex­change rate, have con­strained busi­ness ac­tiv­i­ty and could com­pli­cate ef­forts to di­ver­si­fy the econ­o­my.

Econ­o­mists warn that a pro­longed fall in re­serves could lim­it the Cen­tral Bank’s abil­i­ty to sta­bilise the ex­change rate or cush­ion the econ­o­my against sud­den drops in en­er­gy rev­enues. The Cen­tral Bank’s ta­ble, which tracks da­ta from June 2023 to Au­gust 2025, shows the ero­sion be­gan in ear­ly 2024, co­in­cid­ing with fluc­tu­a­tions in glob­al en­er­gy prices.

Coun­tries that have seen their re­serves drop be­low the three-month thresh­old, such as Sri Lan­ka in 2022 and Ar­genti­na in 2019, faced se­vere eco­nom­ic strain, in­clud­ing for­eign ex­change short­ages, im­port re­stric­tions, and ris­ing in­fla­tion.

Trinidad and To­ba­go’s po­si­tion is not yet at that lev­el, how­ev­er the con­tin­ued slide sug­gests that with­out a turn­around in ex­port earn­ings or new in­flows, the for­eign re­serves cush­ion could weak­en fur­ther in the com­ing months.