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Financial News

Apr 2009 Financial News

Selby Wilson: $$ shortage could force depreciation

Apr 24, 2009

The Trinidad and Tobago dollar could depreciate on its own if the Central Bank does not inject more foreign currency into the banking system, says Selby Wilson.

Wilson, a former minister of finance in the NAR government, said without such an input the demand would exceed supply and foreign currency will be in short supply.

Wilson said it is common knowledge that the country was earning less foreign currency because of the depressed prices in energy products, and if the trend continued by the end of this year the foreign reserves were likely to fall from $9 billion to $6 billion.

Wilson was commenting on a statement on Wednesday by Independent Senator Subhas Ramkelawan that Trinidad and Tobago had enough foreign reserves to prevent a devaluation of the local currency.

He also said what is needed at this time is for Government to consider floating the currency within a wider band.

Congress of the People (COP) leader Winston Dookeran, a former Central Bank governor, is calling for caution on the issue. "In light of the changes in the world economy the managing of currencies is a challenge to all governments if they are to keep the economy competitive and stable," he said yesterday.

Wilson said there have been rumours of money hoarding and citizens were often denied enough foreign currency to pay for the education of their children abroad."What I understand is that manufacturers have the first preference," he added.

Charles Percy, president of the South Trinidad Chamber of Industry and Commerce, said devaluation could mean several things to companies now involved in development of the energy industry.


Source:
Louis B Homer South Bureau
Trinidad Express
Friday, April 24th 2009

http://www.trinidadexpress.com/index.pl/article_business?id=161468803