T&T Government to take measures to halt dollar slide
The Trinidad and Tobago government says it will adopt measures to halt the dollar slide in the foreign exchange reserves. The decrease” has been significant given the “catastrophic decline” in revenue from the energy sector.
Finance Minister Colm Imbert told Parliament on Monday that the decline has had a serious adverse effect on foreign exchange inflows and the country’s foreign reserves.
Presently, foreign exchange inflows from energy taxation are at an all-time low.
Energy sector collapse
“The collapse of oil and gas prices, declining production, and changes in the oil and gas taxation regime have had the effect of reducing the Government’s share of energy receipts,” Imbert said as he presented the TT$50 billion national budget.
Imbert told Parliament that annual inflows of foreign exchange from the energy sector dropped from US$3.2 billion in 2011 to US$500 million in 2017.
84 percent reduction
“This is an 84 percent reduction in foreign exchange inflows which has caused a loss to the country of US$2.7 billion per year in foreign currency. To make up for this shortfall, and to make foreign exchange available to the public, especially the productive sectors, the Central Bank has injected a total of over US$7.5 billion of our reserves into the commercial banking sector in just the last four years.”
Growth in exports essential
He also said that apart from import substitution, one of the main drivers of the new Trinidad and Tobago economy must be growth in exports. This is needed in order to earn foreign exchange and penetrate new markets. However, one of the major challenges for exporters at this time is access to foreign exchange to purchase raw materials and other essential inputs needed for manufacturing.
For more on T&T’s battle to halt the pace of the dollar slide, visit: Trinidad and Tobago dollar depreciates