Apr 2015 Financial News

Printing of money a concern (Barbados)

Apr 27, 2015

FORMER Prime Minister, Owen Arthur, wants a halt to the practice of the Central Bank of Barbados printing money to help finance government deficit.

In his address at the Institute of Chartered Accountants of Barbados (ICAB) seminar last week at Hilton, he made no qualms in stating that the printing of money by the Central Bank to finance government debts is a main threat to the growth and stability of the economy and needs to be brought under control.

He elaborated, “(Rating agency) Moody’s cited this and the pressure it was putting on the country’s currency peg as one of the chief factors for downgrading our bond rating in June 2014. The IMF, in its last Article IV Report, made specific reference to it as a practice which needs to be curbed.”

Indeed, the landscape of the developing world is strewn with the wreckage of economies where the large scale printing of money to finance the deficits of wayward governments has been allowed to become the norm, he said.

Arthur argued that this must be seen as a threat to the stable development of Barbados, that after all of the downgrades and after the government has been forced to borrow recently simply to boost the foreign reserves, the Central Bank in its March 2015 Report indicated that for the first quarter of the year it had provided financing of $341 million to the government.

He stated that the continued printing of money on this scale to meet government’s financial requirements will constitute an act of economic vandalism and must be brought to an end. (NB)

Source:
Barbados Advocate
Monday April 27, 2015

http://www.barbadosadvocate.com/newsitem.asp?more=business&NewsID=43060