No immediate fix for TT foreign exchange shortage

Larry Howai, governor of the Central Bank of Trinidad and Tobago, CBTT, says finding a solution to the ongoing problems in the foreign exchange market remains a priority but that a long-term solution was dependent on mechanisms to bring demand and supply into equilibrium.

But, he added, “that this is still some way off”.

Howai met with representatives of the Bankers Association of Trinidad and Tobago, BATT, on Monday as part of a series of key stakeholder engagements following his recent appointment to the post.

A statement from the central bank after the meeting said Howai emphasised the importance of continued and robust collaboration between CBTT and BATT as the financial sector navigates the current economic environment, and reaffirmed the CBTT’s commitment to working closely with the banking community “to identify pragmatic solutions to challenges in the financial sector in the best interests of the people of Trinidad and Tobago”.

The discussions covered a review of the economy, financial system liquidity as well as issues of foreign exchange supply and demand.

“The governor indicated that finding a solution to the ongoing problems in the foreign exchange market is a priority. He underscored that a long-term solution could only occur when mechanisms are found to bring demand and supply into equilibrium, but that this is still some way off,” the central bank said.

“The banks agreed and provided their recommendations for easing some of the problems faced by consumers’, and Howaii said, adding that Howai, a former finance minister, “committed to considering those recommendations for implementation”.

The Trinidad and Tobago Chamber of Industry and Commerce has highlighted the impact of the persistent foreign exchange crunch, saying businesses, especially small and medium-sized enterprises, struggle to access the necessary foreign currency for imports and international transactions, leading to operational challenges and increased costs.

“Individuals face difficulties in obtaining forex for travel, online purchases, and other personal needs. This shortage has led to the emergence of unregulated markets where forex is traded at higher rates, further complicating the economic landscape,” the private sector group said.

At the meeting with the central bank, the BATT representatives also inquired about plans for the new payment system, the Unified Payments Interface, and signalled their support in progressing this project in a manner that would be most efficient for the banking system.

The governor noted that through continuous engagement and the sharing of ideas and perspectives, meaningful progress can be achieved in tackling challenges in the financial system, and committed to working closely with the banking sector.

“The central bank will continue to work closely with BATT and its members to ensure that the financial system remains resilient, efficient, and responsive to the needs of the wider community,” Howai said.

CMC