Finance Minister Colm Imbert. – Photo by Ayanna Kinsale
MINISTER of Finance Colm Imbert said on Sunday TT’s foreign exchange (forex) availability had been affected by an increase in demand for it in 2023.
Responding to a Sunday newspaper editorial on the subject, Imbert also said supply had been reduced, as repatriation of forex earned through exports had decreased.
A signed statement from the Ministry of Finance said, “The editorial correctly points out that the sales of foreign exchange to the public for the first seven months of 2023 are almost the same as the amount of forex available to the public in the first seven months of 2022, and therefore, there could be deeper issues affecting the availability of forex at this time.”
The statement pointed out that in comparing forex sales for the first eight months of 2022 and 2023, “One will see that the amount of foreign exchange made available by the local banking sector in this year is effectively the same as last year, for the same period.”
But Imbert said forex sales to the public for the first eight months of this year were 26.8 per cent higher than in 2021 and 4.3 per cent higher than in 2019.
“The issue, therefore, is not simply the availability of foreign exchange in 2023, compared to previous years, but rather, it also is the demand.”
Imbert said the growth in TT’s economy – which started in 2022 and continues in 2023 – was driving an increase in forex demand as businesses sought to expand.
“There has also been an explosion in online shopping…which is driving up the usage of US-dollar-denominated credit cards, as consumers take advantage of the availability of cheaper goods overseas.”
He also noted an increase in the cost of imported items.
On supply, Imbert said some businesses were choosing to keep their forex overseas, reducing the repatriation of forex earned through export earnings – which reached a high in 2022 – and having a negative impact on available forex supply.
Imbert added that he would soon hold discussions with the Central Bank, commercial banks and the business community to discuss the increased demand for forex, strategies to deal with current challenges, a policy for forex allocation and distribution and strategies to increase the repatriation of forex earned overseas by local businesses and foreign businesses operating in TT.