Oct 2016 Financial News

Inflation rises to 3.1 per cent

Oct 03, 2016

The country’s headline inflation rate rose slightly to 3.1 per cent, latest data from the Central Bank shows. According to the Central Bank’s Monetary Policy Committee, the rate was up from 2.9 per cent in July. 

Core inflation, which excludes food prices, increased from 2.0 per cent to 2.2 per cent between July and August, while food inflation rose from 6.8 per cent to 7.2 per cent.

For the first seven months of the year, domestic economic activity remained subdued. Output of natural gas and crude oil declined by just over 10 per cent, partly due to continued maintenance and upgrade programmes by major energy companies. Indicators on construction and distribution also showed sluggish non-energy sector activity into the third quarter, although finance maintained some buoyancy. 

“The latest official labour statistics point to a small rise in the unemployment rate from 3.5 per cent in the final quarter of 2015 to 3.8 per cent in the first three months of 2016,” the Central Bank said.

The report continued: “Liquidity in the financial system remained relatively steady during the third quarter, with commercial banks’ excess reserves at the Central Bank averaging around $3.2 billon daily. The Central Bank stepped up its open market operations in September, with net issues of around $1.2 billion in the month to September 26. In addition, the Bank’s sales of foreign exchange extracted the equivalent of roughly $1 billion from the system.”

Growth in private sector credit lost some momentum due in part to a fall-off in lending to businesses. However, credit to the private sector by the consolidated financial sector rose by 4.9 per cent in July, while lending to businesses slipped by -0.2 per cent.

“Against this backdrop the Central Bank’s Monetary Policy Committee decided to maintain the “Repo” rate at 4.75 per cent at its September 2016 meeting. The bank will continue to carefully analyse domestic and international economic developments in its deliberations and decisions.”

The next Monetary Policy Announcement is scheduled for November 25.

Source:
Trinidad Guardian
Saturday October 1, 2016

http://www.guardian.co.tt/business/2016-09-30/inflation-rises-31-cent