Aug 2005 Financial News

Inflation rises to 7.3%

Aug 26, 2005

INFLATION in July was 7.3 per cent compared to 3.3 per cent one year earlier.

While this increase mainly reflected the surge in food prices aggravated by the recent floods, there have also been increases in a range of other components of the Retail Prices Index.

Core inflation continued to hover around 2.7 per cent for the first seven months of the year, compared to 1.3 per cent in the corresponding period last year.

As interest rates in the US continue to rise, there has been a narrowing in the spread between US and TT dollar short-term interest rates.

As at end July 2005, the spread was 1.5 per cent, compared to 3.3 per cent one year earlier.

Net fiscal injections remain high, boosting liquidity in the financial system, while pressures in the foreign exchange market persist related to large capital transactions, the liquidity overhang and the declining interest rate spreads.

A statement issued from the Central Bank said that it was addressing the liquidity and foreign exchange challenges through open market operations and foreign exchange sales.

Trinidad Express
Friday, 26th August, 2005
http://www.trinidadexpress.com/index.pl/article_business?id=98161404