The Min­istry of Labour and Small En­ter­prise De­vel­op­ment re­port­ed that the num­ber of per­sons re­trenched be­tween Jan­u­ary and Oc­to­ber rose 27 per cent year-on-year. This in­for­ma­tion is con­tained in the Cen­tral Bank’s Mon­e­tary Pol­i­cy Re­port (De­cem­ber 2019).

The Cen­tral Bank’s Mon­e­tary Pol­i­cy Com­mit­tee (MPC) con­sid­ered shift­ing ex­ter­nal con­di­tions, es­pe­cial­ly on the trade and geopo­lit­i­cal fronts.

“Do­mes­ti­cal­ly, avail­able in­di­ca­tors sug­gest that while there re­mains room for macro­eco­nom­ic pol­i­cy sup­port to­wards a durable eco­nom­ic re­cov­ery, ex­ter­nal bal­ance has not yet been re­stored,” the re­port stat­ed.

“Tak­ing these fac­tors in­to con­sid­er­a­tion, the MPC agreed to main­tain the re­po rate at 5.00 per cent. The Bank will con­tin­ue to care­ful­ly mon­i­tor and an­a­lyze in­ter­na­tion­al and do­mes­tic de­vel­op­ments.”

The re­port not­ed that the growth in pri­vate sec­tor cred­it ex­tend­ed by the con­sol­i­dat­ed fi­nan­cial sys­tem slowed to 4.3 per cent in Sep­tem­ber (year-on-year) com­pared with 4.5 per cent in Ju­ly.

“The con­trac­tion in busi­ness cred­it deep­ened to 5.5 per cent but con­sumer cred­it, dri­ven by debt con­sol­i­da­tion and re­fi­nanc­ing, grew by 5.9 per cent, while re­al es­tate mort­gage loan growth ac­cel­er­at­ed to 10.9 per cent.

“Com­mer­cial banks’ dai­ly ex­cess re­serves at the Cen­tral Bank av­er­aged around $5.5 bil­lion in No­vem­ber. The Cen­tral Bank’s liq­uid­i­ty man­age­ment op­er­a­tions have bal­anced the pub­lic sec­tor’s fi­nanc­ing re­quire­ments with pre­vail­ing cred­it and in­fla­tion­ary con­di­tions.”

Ac­cord­ing to Cen­tral Sta­tis­ti­cal Of­fice (CSO) da­ta, head­line in­fla­tion slowed to 0.3 per cent in the 12 months to No­vem­ber, with core in­fla­tion (which ex­cludes food prices) al­so de­cel­er­at­ing to 0.6 per cent.

“Mean­while, the food sub-in­dex as a whole reg­is­tered a year-on-year de­cline of -1.1 per cent in No­vem­ber 2019, re­flect­ing re­duc­tions in the mea­sured prices of veg­etable items in the In­dex,” the Cen­tral Bank added.

“The in­ter­est rate gap be­tween three-month TT and US trea­sury se­cu­ri­ties has re­mained neg­a­tive but nar­rowed to -51 ba­sis points at the end of No­vem­ber 2019. TT short term rates fell by 24 ba­sis points since Au­gust 2019 in the con­text of the ex­cess liq­uid­i­ty con­di­tions, but equiv­a­lent US rates de­creased by 40 ba­sis points dur­ing the same pe­ri­od.”

The Cen­tral Bank main­tained its fort­night­ly sales of for­eign cur­ren­cy to au­tho­rised deal­ers and of­fi­cial in­ter­na­tion­al re­serves were US$6.93 bil­lion at the end of No­vem­ber—US$640 mil­lion low­er than at the start of the year.

It not­ed that glob­al growth soft­ened to­wards the end of 2019, with the In­ter­na­tional­Mon­e­tary Fund (IMF) low­er­ing its an­nu­al pro­jec­tion to 3.0 per cent—0.2 per cent be­low its mid-year es­ti­mate.

Do­mes­ti­cal­ly, the Cen­tral Bank stat­ed, in the third quar­ter of 2019, nat­ur­al gas pro­duc­tion in­creased to 3,604 mil­lion cu­bic feet per day (mm­cf/d), 3.7 per cent above out­put in the same quar­ter of 2018, de­spite main­te­nance shut­downs at two large nat­ur­al gas plat­forms.

“This spurred year-on-year in­creas­es in petro­chem­i­cals (23.3 per cent) and liq­ue­fied nat­ur­al gas (8.0 per cent). At the same time, over the third quar­ter of 2019, crude oil pro­duc­tion re­mained at its lev­el of just un­der 60,000 bar­rels per day dur­ing the first half of the year, com­pared with a dai­ly av­er­age of around 64,000 bar­rels in 2018—a re­flec­tion of the on­go­ing mat­u­ra­tion of the oil fields.”

In non-en­er­gy sec­tors, pre­lim­i­nary da­ta for in­di­ca­tors mon­i­tored by the Bank “point to mod­est ex­pan­sions in the dis­tri­b­u­tion and fi­nance sec­tors dur­ing the third quar­ter.”

“An uptick in lo­cal sales of ce­ment sug­gests that con­struc­tion ac­tiv­i­ty is re­spond­ing to the rise in pub­lic sec­tor in­fra­struc­tur­al in­vest­ments.”

The Cen­tral Bank’s next Mon­e­tary Pol­i­cy an­nounce­ment is sched­uled for March 27, 2020.