US$3 billion in credit card purchases

Finance Minister Colm Imbert yesterday disclosed a total of US$3 billion in foreign exchange was spent in credit card purchases over the last three years. Responding to questions from Opposition MPs in the House of Representatives, Imbert said credit card purchases using cards issued by commercial banks in TT, amounted to $1.2 billion last year.

“One of the largest consumers of foreign exchange is the importation of motor cars.” After reminding MPs that TT liberalised its exchange rate regime in April 1993, Imbert said this removed controls on foreign exchange transactions.

However he said the Central Bank has intervened in the commercial banking sector from time to time, to supplement the amount of foreign exchange available to the public from commercial banks. “Over the last three years, a total of almost US$6 billion has been sold to the commercial banks from the Government’s foreign exchange reserve at the Central Bank,” Imbert said. The minister said every dollar of foreign exchange provided by the Central Bank to the commercial banks, reduces the Government’s foreign reserve by an equivalent amount. He said interventions by the Central Bank only involve authorised dealers of foreign exchange.

Imbert said the Central Bank gives a general guideline to commercial banks that preference should be given to trade and manufacturing, “in the sale by the bank to the public of the Government’s foreign exchange.” In distributing the Government’s foreign exchange, Imbert said, “The banks are expected to follow an honour system and to distribute this foreign exchange equitably and impartially to all businesses and individuals, whether large, medium sized or small.”

He said Government is continuously monitoring the situation to determine whether any adjustments need to be made to the guidelines given to banks when distributing the Government’s foreign exchange. Dismissing claims from Naparima MP Rodney Charles, Imbert said, “There is no outsourcing of foreign exchange. It is a function of law.”