The Central Bank of Trinidad and Tobago (CBTT) has injected US$1.012 billion into the local foreign exchange market between January and October 2021.

This has come about as the Dr Keith Rowley-led government seeks to put in measures to rectify the foreign exchange shortage in time for the upcoming peak demand period by commercial enterprises.

Finance Minister Colm Imbert, who made the announcement disclosed that the Government, through the Exim Bank, has provided access to a further US$524 million, which “led to a total intervention of US$1.536 billion in the forex market for the first ten months of this year.”

“This intervention enabled authorized dealers to meet demand as foreign currency sales by authorised dealers to the public rose by 6.5 per cent to $3,992.9 million over the January-to-October period relative to the same period in the prior year,” Imbert said.

Getting a better understanding of developments in the forex market

He explained, “Further, the Central Bank engages in frequent dialogue with authorised dealers with a view to gaining a better understanding of emerging developments in the forex market and improving the effectiveness of its intervention programme.”

The CBTT routinely sells foreign exchange to authorized dealers in the market to meet excess demand by covering the net sales gap. However, over the period January to October 2021, the net sales gap was US$843.1 million, representing an 11.9 per cent decline from the previous period.

Arguing that the Rowley administration monitors the FX market for foreign exchange on a regular basis and takes appropriate action as and when required, the Finance Minister pointed to the three new special-purpose windows for foreign exchange that have been established by the governing administration.

One window has been made available at CBTT for state enterprises to ensure the uninterrupted supply of essential goods and services. In addition, the two other special-purpose forex windows have been established at the Exim Bank for the importation of essential goods and the other for the importation by export manufacturers of raw materials and equipment.

These three facilities, Imbert explained, provide forex on a targeted and structured basis and are outside of but in addition to regular injections of forex by the Central Bank into the commercial banking system.