Rowley defends refusal to devalue TTD: IMF not a Bible

The International Monetary Fund (IMF), “is not a Bible.” Prime Minister Dr Keith Rowley made this observation as he said Government was not going to devalue the TT dollar.

In a television interview on Wednesday night, the Prime Minister said TT respected and co-operated with the IMF. However he stressed, “Everything the IMF says is not gospel.” Rowley said while some people believed a devaulation could remedy foreign exchange problems in TT, “The main reason that we have not jumped to devalue the currency is that we acknowledge and we know, there are downsides to a devaluation.”

He said those people advocating for a devaluation do not have to manage the consequences that could arise from such a decision. “Only the Government has to look at all those sides of a decision,” the Prime Minister said.

Rowley said even if a devaluation were to give the competitive edge some people want, “If that competive edge does not generate commensurately the export, all the downsides of devaluation you will get.”

He said unlike Barbados, we have allowed the currency to move. Rowley also said there was the compelling view that “if you devalue the currency while you are shorting on the foreign dollars, you’re not really improving the situation because you are devaluing a smaller amount of US dollars to create more TT dollars.”

He said some people advocated a “Robin Hood” approach to the situation which involved using a sharp knife to bleed a patient to bring down the patient’s fever.

However, he said, “Not very many patients survived that.”

While Government receives copious amounts of advice on several matters, Rowley said Government was not obliged to accept all of that advice.

He said people who made calls to shut down Unemployment Relief Programme (URP) and Community-based Environmental Protection and Enhancement Programme (CEPEP) within a $50 billion budget, did not know that could, “create a billion dollars worth of trouble.”

Rowley said 2018 would be a challenging year but Government was optimistic there could be signs of economic recovery. He added Government had no plans for mass retrenchment of workers.