Oct 2016 Financial News

Central Bank unveils five-year strategic plan

Oct 25, 2016

The Central Bank anticipates an increase in oil and gas production in 2017, but says an economy-wide recovery is “likely to take some time to be firmly established” because global energy prices remain very uncertain. 

The Central Bank’s analysis is contained in a new five-year strategic plan, from fiscal 2017 to 2021, which is dated September 30, but was placed on the institution’s website on October 21.

As a result of the slowness of the recovery on the on-shore sector, according to the Central Bank, T&T “can expect to continue to operate in a challenging domestic environment over the early part of the five-year span of the strategic plan.”

This will mean that the Bank’s mandate to maintain inflation will be placed in the context of “likely severe constraints on economic growth.” 

The strategic plan says as there is a possibility that the economic slowdown could impact on the ability of borrowers to service their loans, the Central Bank will have to pay “very close attention” to financial supervision of the quality of loans extended by financial institutions.

The Central Bank said that the international scene is likely to remain “unsettled for some time” in the wake of continued weakness in European economies, the delayed sustain rise in US interest rates, the fallout from Brexit and nervousness about investments in emerging markets”.

It said the loss of correspondent banking relationships is of particular concern to Caribbean countries.

“The growing integration of Trinidad and Tobago’s financial market with the rest of the world, developments in international payment systems, creation of new financial products, incidence of cross mergers and acquisitions will quickly impact the domestic market,” according to the Central Bank.

Following their summit in Guyana earlier this year, Caribbean Community (CARICOM) leaders announced that a global conference on the issue will be held in Antigua this week.

Correspondent banks, which are mainly large, international banks based in the United States of America, Europe and Canada, provide Caribbean states with vital access to the international financial system, by offering services to smaller, domestic banks and financial institutions to complete international payments and settlements.

However, many banks, which provide correspondent banking services have been seeking to manage their risks by severing ties with institutions in the region.

Source:
Trinidad Guardian
Tuesday October 25, 2016

http://www.guardian.co.tt/business/2016-10-25/central-bank-unveils-five-year-strategic-plan