Mar 2009 Financial News

Browne: No plans to devalue T&T dollar

Mar 11, 2009

Government has no plans to devalue the T&T dollar, Minister in the Ministry of Finance Mariano Browne assured yesterday, adding that there was an “ample supply” of foreign exchange holdings to meet existing demand. Replying to Opposition questions on various economic aspects in the Senate, Browne also said there were also signs that the real estate market was stabilising and the rate of consumer credit expansion was slowing. “These positive trends all point to an appreciable reduction in inflation which is expected to fall to single digits during the second quarter of 2009...Inflation has already fallen from 15.4 per cent to 11.7 per cent,” he said.

Browne said unemployment levels also fell from 5.3 per cent in the second quarter of 2007/2008 to 4.6 per cent in the third quarter of that period. On T&T’s foreign exchange rate, he said: “The floating exchange rate regime has worked well since its inception in 1993...After some initial depreciation, the exchange rate has stabilised between TT$6.29 and TT$6.33 to US$1.” “This has boosted the confidence of investors and savers as well as provided a competitive edge to our manufacturers,” he added. Moreover, Browne said, gross foreign reserves stood at US$9.4 billion as at the end of December .

“There is an ample supply of foreign exchange holdings to meet existing demand and the exchange rate has continued to remain very stable,” he said. Asked by UNC senators about possible devaluation, Browne said: “I would like to give the assurance to the nation that Government has every intention of remaining committed to a flexible exchange rate system and there’s no intention to move away from that. “In as much as the Government does not determine the exchange rate and its parity, there’s no intention on Government’s part to devalue the currency and Government will make every effort to maintain the system as it stands,” he said.

Browne was also asked by UNC senators whether T&T was heading into a recessionary period of negative growth. Stating that T&T was not in recession, Browne said: “Government has opted to maintain a critical level of expenditure that will sustain economic growth while minimising the impact of unemployment. “We’ve indicated the difficulty we have, and will have in terms of maintaining the budget figures...Government has indicated it will revise the numbers if and when necessary,” he added.


Source:
Gail Alexander
Trinidad Guardian
Wednesday March 11, 2009

http://guardian.co.tt/business/business/2009/03/11/browne-no-plans-devalue-tt-dollar