Sep 2005 Financial News

'Cash outflows reach US$722m'

Sep 16, 2005

OUTFLOWS on capital transactions for the first eight months of this year have spiralled to approximately US$722 million, Minister in the Ministry of Finance Conrad Enill announced yesterday.

The minister made the announcement during the opening speech at the two-day "Banking on the Future Summit" at Crowne Plaza, Wrightson Road, Port of Spain, which is being attended by both local and international members of the banking fraternity.

Addressing the issue of capital account liberalisation, Enill noted that some observers have concluded that in small countries such as Trinidad and Tobago, capital liberalisation creates an exposure to net capital outflows.

"In Trinidad and Tobago, we have been experiencing our own challenges in this regard. This has manifested itself in large outflows for various capital transactions, which have from time to time put pressure on the foreign exchange market," he said.

According to Enill, annual sales of foreign exchange for capital transactions have more than doubled since 2002, increasing from US$373 million in 2002 to an average of US$746 million in 2003/2004.

"For the period, January to August 2005, outflows on capital transactions has amounted to US$772 million. Of these totals, the amount raised by regional governments and corporates has been as high as 61 per cent in one year," he said.

However, he noted that the Central Bank "has been managing this situation through a variety of mechanisms".

The bank, he added, also has stuck to its commitment to provide a certain amount of foreign exchange to the market each month.

Central Bank sales of foreign exchange to the market for the year to date has amounted to US$375 million, Enill said.

On broader related matters, the minister also indicated that the achievement of macro-economic stability and a sound and well supervised banking system have been important preconditions for financial liberalisation in Trinidad and Tobago.

"I see financial liberalisation as an environment in which financial markets are able to carry on their legitimate business of intermediation in a responsible manner. This definition implies not only that financial markets must be able to provide the intermediation needed for economic agents to satisfy their needs, but also that the wider environment must be supportive of this activity," said Enill.

OUTFLOWS on capital transactions for the first eight months of this year have spiralled to approximately US$722 million, Minister in the Ministry of Finance Conrad Enill announced yesterday.

The minister made the announcement during the opening speech at the two-day "Banking on the Future Summit" at Crowne Plaza, Wrightson Road, Port of Spain, which is being attended by both local and international members of the banking fraternity.

Addressing the issue of capital account liberalisation, Enill noted that some observers have concluded that in small countries such as Trinidad and Tobago, capital liberalisation creates an exposure to net capital outflows.

"In Trinidad and Tobago, we have been experiencing our own challenges in this regard. This has manifested itself in large outflows for various capital transactions, which have from time to time put pressure on the foreign exchange market," he said.

According to Enill, annual sales of foreign exchange for capital transactions have more than doubled since 2002, increasing from US$373 million in 2002 to an average of US$746 million in 2003/2004.

"For the period, January to August 2005, outflows on capital transactions has amounted to US$772 million. Of these totals, the amount raised by regional governments and corporates has been as high as 61 per cent in one year," he said.

However, he noted that the Central Bank "has been managing this situation through a variety of mechanisms".

The bank, he added, also has stuck to its commitment to provide a certain amount of foreign exchange to the market each month.

Central Bank sales of foreign exchange to the market for the year to date has amounted to US$375 million, Enill said.

On broader related matters, the minister also indicated that the achievement of macro-economic stability and a sound and well supervised banking system have been important preconditions for financial liberalisation in Trinidad and Tobago.

"I see financial liberalisation as an environment in which financial markets are able to carry on their legitimate business of intermediation in a responsible manner. This definition implies not only that financial markets must be able to provide the intermediation needed for economic agents to satisfy their needs, but also that the wider environment must be supportive of this activity," said Enill.

OUTFLOWS on capital transactions for the first eight months of this year have spiralled to approximately US$722 million, Minister in the Ministry of Finance Conrad Enill announced yesterday.

The minister made the announcement during the opening speech at the two-day "Banking on the Future Summit" at Crowne Plaza, Wrightson Road, Port of Spain, which is being attended by both local and international members of the banking fraternity.

Addressing the issue of capital account liberalisation, Enill noted that some observers have concluded that in small countries such as Trinidad and Tobago, capital liberalisation creates an exposure to net capital outflows.

"In Trinidad and Tobago, we have been experiencing our own challenges in this regard. This has manifested itself in large outflows for various capital transactions, which have from time to time put pressure on the foreign exchange market," he said.

According to Enill, annual sales of foreign exchange for capital transactions have more than doubled since 2002, increasing from US$373 million in 2002 to an average of US$746 million in 2003/2004.

"For the period, January to August 2005, outflows on capital transactions has amounted to US$772 million. Of these totals, the amount raised by regional governments and corporates has been as high as 61 per cent in one year," he said.

However, he noted that the Central Bank "has been managing this situation through a variety of mechanisms".

The bank, he added, also has stuck to its commitment to provide a certain amount of foreign exchange to the market each month.

Central Bank sales of foreign exchange to the market for the year to date has amounted to US$375 million, Enill said.

On broader related matters, the minister also indicated that the achievement of macro-economic stability and a sound and well supervised banking system have been important preconditions for financial liberalisation in Trinidad and Tobago.

"I see financial liberalisation as an environment in which financial markets are able to carry on their legitimate business of intermediation in a responsible manner. This definition implies not only that financial markets must be able to provide the intermediation needed for economic agents to satisfy their needs, but also that the wider environment must be supportive of this activity," said Enill.

Driselle Ramjohn
The Trinidad Express
Friday, 16th September, 2005
http://www.trinidadexpress.com/index.pl/article_business?id=102198164