No devaluation of Barbados currency
The Barbados government on Friday reiterated that it has no intention of devaluing the local currency with the Barbados dollar now valued at US$0.50 cents.
Finance Minister Chris Sinckler, speaking at the annual conference of the Institute of Chartered Accountants of Barbados, said several buffers are now in place to prevent a devaluation of the Barbados currency.
Disagreement with economists
In recent times, the Bajan government has disagreed with positions adopted by several economists including former prime minister Owen Arthur that the island should seek to engage in a program with the International Monetary Fund (IMF) to help revive the economy. Economic observers have also urged a devaluation of the dollar.
Sufficient foreign reserves
But Sinckler, who has already made it known the government would not adopt such a policy, said “It is true that the reserves position, the bed rock of maintaining the desired peg against the US dollar, is, as I highlighted before, not in the most comfortable position. However, the reserves, just about eight weeks of imports, are enough to defend the local currency.”
Continuing, he said, “Barbados still possesses…second tier resources…which are held by other financial and commercial institutions externally which we can tap into if necessary. We do not anticipate such a move will be necessary, and we must ensure that that will not be the case,” he told the conference.
Sustainable Recovery Program
Sinckler said that the government would soon be making public the “Barbados Sustainable Recovery Program,” the draft of which would be available from next month. He said the program would include legislation that would ultimately reduce the cost of doing business across several sectors in the country.
“The broad objective of the plan, ….. is to boost our foreign reserve earning by creating more attractive conditions for foreign direct investment through a standardized investment incentive regime strengthened by incentive legislation and a reform implementation mechanism across public and private sectors.
“In this regard I think I should say without letting out too much at this stage that we are going to bring legislation to rationalize all of the incentive regimes,” he added.
For more on Barbados currency, click the link: Barbados Central Bank launches banknote App