Imbert agrees with UWI economist on forex

FINANCE Minister Colm Imbert agreed on Thursday agreed with views expressed by UWI economist Dr Dave Seerattan about foreign exchange.

Seerattan's views were reported in Newsday's Business Day magazine.

In a tweet, Imbert said, "Just read an article on TT economics, in the Business Newsday. An interview with Dr Dave Seerattan, a UWI economist." He added, "His views on growth, forex (foreign exchange), expenditure levels etc are a breath of fresh air – balanced, sensible and relevant. Amazed that such views exist there."

In the article, Seerattan said, "The foreign exchange rate is one of the issues that is beset by behavioural problems, psychological problems. I believe people behave irrationally at times, so we (economists) have to be very careful when we are discussing the foreign exchange market and exchange rate."

He said there is no doubt the current exchange rate is overvalued, but the problem decision-makers have is how to make the adjustment. “A lot of people talk about depreciation being this magic bullet that solves our problem, but the truth is, no one policy is going to solve all the problems, and what you need is a mix of policy measures...and every policy will have costs attached to it, unintended consequences that you have to be cognisant about."