Trinidad and Tobago Prime Minister Keith Rowley's stance on the local currency becomes a focal point as the country grapples with a prolonged foreign exchange crisis. In a significant move, Rowley firmly states that there are no plans to devalue the local dollar, emphasizing the potential negative impacts on the population and imported goods prices.
"Trinidad's Currency Decision: Protecting the Masses from Devaluation"
Meeting with US Secretary of State
Trinidad and Tobago Prime Minister Keith Rowley participated in a crucial meeting with US Secretary of State Antony Blinken in the Jefferson Room of the State Department in Washington, DC on Jan. 29, 2024. This event added another layer to the country's economic discussions.The ongoing foreign exchange crisis has put the nation in a tight spot. The official rate of the T&T dollar is just under US$7 - 1 TT, but the growing black market trade has seen American dollars being bought at significantly higher rates, reaching as much as 9 - 10 - 1. This situation is further exacerbated by the demand for money ahead of the Christmas holidays, putting more pressure on the exchange rate.Parliamentary Debate and Special Interest Groups
Speaking in parliament on Monday, Prime Minister Keith Rowley blamed special interest groups for demanding a devaluation. He suggested that these groups would be the ones to buy up foreign currencies if it became more expensive, while the less wealthy would struggle to obtain dollars. This sparked a heated debate within the country.Successive Barbadian governments have refused to tinker with the exchange rate of US$2 - 1 Barbadian, while Jamaica and Suriname have opted to float their currencies on the open market. As of this week, the Jamaican dollar was weakening almost daily, trading at $156.21 - 1, and Suriname is at US$1 - 35 and also showing signs of weakening. Guyana, another major player, has long floated its currency and it has fluctuated between $200 - 1 to $210 - 1 over the past three decades.Reasons for Currency Pressure
PM Rowley also pointed to the federation with Tobago's taste for products from overseas as a major contributor to the unrelenting pressure on the currency. In 2024, there is an increased demand for foreign exchange due to the growth of the economy and the years-long preference for foreign goods and online purchasing.The amount of dollars available in the banking system over the past two years is the same as a decade ago, approximately US$7 billion. This indicates that there is no reduction in the marketplace. The minister of finance has already met with the four largest commercial banks to discuss the matter and will be meeting with business organizations in the next month.An investigation by the Guardian newspaper suggests that car dealers and importers are among those putting the most pressure on the dollar. Meanwhile, officials like Finance Minister Com Imbert point to credit card purchases amounting to about $1 billion yearly.The Trinidad and Tobago government is determined to protect the interests of the population and is taking steps to address the currency crisis. The decisions made will have a significant impact on the country's economic future.