Re­pub­lic Bank re­duced the US-dol­lar spend­ing lim­it on some of its cred­it cards by 50 per cent last week as a re­sult of in­creased de­mand for for­eign ex­change and the prospect of re­duced short-term in­flows of for­eign ex­change, a Cen­tral Bank of­fi­cial said yes­ter­day.

In what it de­scribed as an im­por­tant no­tice is­sued last Fri­day af­ter­noon, Re­pub­lic Bank said, “Ef­fec­tive Au­gust 21, 2025, the max­i­mum US dol­lar spend­ing lim­it per billing cy­cle on Re­pub­lic Bank cred­it cards will be US$2,500 or the US$ cred­it lim­it of the ac­count, if less than US$2,500.

“This change in­cludes all trans­ac­tions con­duct­ed out­side of Trinidad and To­ba­go as well as all in­ter­na­tion­al on­line trans­ac­tions, in­clud­ing trans­ac­tions where the cho­sen billing cur­ren­cy is TTD. These on­line trans­ac­tions will be in­clud­ed in the US$2,500 billing cy­cle lim­it.

“All lo­cal TTD trans­ac­tions re­main un­af­fect­ed.”

The Cen­tral Bank of­fi­cial was re­mind­ed of a state­ment is­sued by for­mer min­is­ter of fi­nance, Colm Im­bert, on Sep­tem­ber 23, 2023, two days af­ter Re­pub­lic Bank re­duced the US-dol­lar lim­it on its cred­it cards from US$10,000 to US$5,000.

In a news re­lease in which he stat­ed that he was not in­volved in the Re­pub­lic Bank de­ci­sion in any way, Im­bert said, “Up­on in­ves­ti­ga­tion, the Bank ad­vised that its cred­it card sales had reached an un­sus­tain­able lev­el in Sep­tem­ber 2023, and it had no choice but to re­duce the lim­its on cred­it cards to stay with­in its own ap­proved guide­lines for what is re­ferred to in the in­dus­try as a “short po­si­tion.”

“Up­on be­ing in­formed of this de­ci­sion of Re­pub­lic Bank, af­ter the fact, it was de­ter­mined by the Min­istry of Fi­nance that the sales by all banks of for­eign ex­change us­ing cred­it cards in Trinidad and To­ba­go (over­seas trans­ac­tions) had in fact reached close to US$6 mil­lion a day in Sep­tem­ber 2023, with Re­pub­lic Bank be­ing re­spon­si­ble for a sig­nif­i­cant per­cent­age of these sales.”

Close to US$6 mil­lion spent by lo­cal com­mer­cial banks to pay off US-dol­lar charges on cred­it cards in Sep­tem­ber 2023 would have amount­ed to US$180 mil­lion a month and US$2.16 bil­lion a year.

In its 2023 An­nu­al Eco­nom­ic Sur­vey, the Cen­tral Bank said the sales of for­eign ex­change by au­tho­rised deal­ers to the pub­lic reached US$6.228 bil­lion in 2023. At 35 per cent, the re­port out­lined that cred­it card pay­ments were the largest call on for­eign ex­change sales by au­tho­rised deal­ers to the pub­lic based on all re­port­ed trans­ac­tions in 2023. Thir­ty-five per cent of US$6.228 bil­lion is US$2.179 mil­lion, just over the es­ti­mate in the Sep­tem­ber 2023 news re­lease.

In an in­ter­view with Guardian Me­dia yes­ter­day, the Cen­tral Bank of­fi­cial ex­plained that each of the au­tho­rised deal­ers, most­ly com­mer­cial banks, fund cred­it card pay­ments based on for­eign ex­change they pur­chase from sell­ers of for­eign ex­change, most­ly en­er­gy com­pa­nies and large do­mes­tic ex­porters, and from the Cen­tral Bank. On av­er­age, 80 per cent of what the au­tho­rised deal­ers sell to the mar­ket comes from the en­er­gy com­pa­nies and the large do­mes­tic ex­porters and 20 per cent from the Cen­tral Bank.

“The com­mer­cial banks es­ti­mate the for­eign ex­change re­quired to set­tle their cred­it card oblig­a­tions based on es­tab­lished pat­terns of spend­ing of their cus­tomers and they com­pare that with the US-dol­lar rev­enues they ex­pect to pur­chase from sell­ers of for­eign ex­change.

“Some­times this re­sults in the com­mer­cial banks tak­ing short po­si­tions, which means sell­ing for­eign ex­change to the mar­ket ahead of them re­ceiv­ing for­eign ex­change from the tra­di­tion­al sell­ers.

“These short po­si­tions are ap­proved by the boards of the com­mer­cial banks and this in­for­ma­tion is con­veyed to the Cen­tral Bank. These short po­si­tions are re­viewed by the Cen­tral Bank on a reg­u­lar ba­sis,” said the of­fi­cial.

The Cen­tral Bank staffer said that last Thurs­day, Re­pub­lic Bank in­formed the Cen­tral Bank that “it was short as a re­sult of high­er pay­ment oblig­a­tions and less for­eign ex­change in­flows than they had pre­dict­ed.”

Re­pub­lic Bank al­so in­formed the Cen­tral Bank on Thurs­day that it was propos­ing to re­duce the US-dol­lar cred­it lim­it on all of its cred­it cards as a means of ad­dress­ing the is­sue.