[UPDATED] Kamla: Governor Hilaire mismanaging Central Bank

Opposition Leader Kamla Persad-Bissessar says Central Bank Governor Dr Alvin Hilaire must account for what she believes is his mismanagement at the bank.

In a statement on Saturday, Persad-Bissessar recalled that at the launch of the Central Bank's Financial Stability Report 2020, on Thursday, Hilaire had said he was optimistic about the state of the economy.

She believes TT's current economic situation does not reflect that optimism.

"Given the severity of our economic crisis, one wonders what inspires this 'optimism' expressed by the Central Bank Governor. He either clearly doesn't read how own reports or wishful thinking has replaced data-driven monetary policy at the Central Bank," she said.

According to the Central Bank's Monetary Policy Report of May 2021, Persad-Bissessar noted, "Domestic economic activity contracted in the fourth quarter of 2020 primarily due to sharp declines in the energy sector and indicators point to continued weak activity in early 2021."

She added the Central Bank's Financial Stability Report also noted that the number of people retrenched increased to 2,744 in 2020 compared to 1,530 in 2019. It also said there was a contraction of economic activity by 8.8 per cent.

"These are alarming statistics that need to be properly addressed by the Central Bank Governor."

Accusing the PNM of borrowing "billions upon billions with little to no transparency as to how these borrowings are being spent," Persad-Bissessar described as "truly bizarre," Hilaire's statement that he "frowns upon debt."

She said the Central Bank even boasts that TT's official reserves rose marginally to US$7 billion from US$6.9 billion in 2019 "which they credit to external borrowing and withdrawals from the Heritage and Stabilisation Fund (HSF)."

Persad-Bissessar said, "This is the same as someone patting themselves on the back for taking out a credit card, going on a spending spree, then passing the bill to their children to pay off. It is future generations who will now have the burden of repaying the massive debt the PNM is incurring."

The Opposition Leader also accused Hilaire of blaming the covid19 pandemic for Government's excessive borrowing. She said he "conveniently" forgot that the PNM dipped into the HSF multiple times, starting as far back as 2016.

"The Rowley government was borrowing to pay recurrent expenditure well before the covid19 pandemic. The economic crisis our nation faces today is a result of the disastrous economic policies of the Rowley regime, all with the tacit approval of the Governor of the Central Bank."

Persad-Bissessar claimed over the past six years, Hilaire "stood still as the PNM emasculated the role of the Central Bank Governor and eroded the once-proud independence of this critical institution."

She said Hilaire's "abysmal record as a willing accomplice to the Minister of Finance is there for all to see."

Persad-Bissessar claimed he "massively failed" Clico policyholders by allowing the Minister of Finance to sell assets under the purview of the Central Bank, such as No Man's Land, to Government in order to facilitate the failed Sandals project.

"No explanation has ever been given as to the current status of this multi-million dollar investment."

Further, she said Hilaire sat idly by as Government amended the Central Bank Act, which allowed the Minister of Finance to access confidential information on bank employees.

"Though every former Governor of the Central Bank publicly voiced their concerns, Hilaire said nothing about this brazen act which effectively stripped the Central Bank of its independence, rendering it a division of the Ministry of Finance."

Persad-Bissessar said democratic nations have independent central banks for a reason.

"Monetary policy is too critical to be under the total control of politicians. "

She added the Central Bank's main function is to provide economic stability, while the role of the Government is to craft economic policies which promote growth and development.

"Currently, neither the Central Bank nor the Government is doing their jobs. It is clear that if Trinidad and Tobago is to emerge from this economic crisis, the Central Bank will first need to be restored as an independent institution."

This story has been adjusted to include additional details. See original post below.

Opposition Leader Kamla Persad-Bissessar says Central Bank Governor Dr Alvin Hilaire must account for what she believes is his mismanagement at the bank.

In a statement on Saturday, Persad-Bissessar recalled that at the launch of the Central Bank's Financial Stability Report 2020, on Thursday, Hilaire had said he was optimistic about the state of the economy.

She believes TT's current economic situation does not reflect that optimism.

"Given the severity of our economic crisis, one wonders what inspires this 'optimism' expressed by the Central Bank Governor. He either clearly doesn't read how own reports or wishful thinking has replaced data-driven monetary policy at the Central Bank," she said.

According to the Central Bank's Monetary Policy Report of May 2021, Persad-Bissessar noted, "Domestic economic activity contracted in the fourth quarter of 2020 primarily due to sharp declines in the energy sector and indicators point to continued weak activity in early 2021."

She added the Central Bank's Financial Stability Report also noted that the number of people retrenched increased to 2,744 in 2020 compared to 1,530 in 2019. It also said there was a contraction of economic activity by 8.8 per cent.

"These are alarming statistics that need to be properly addressed by the Central Bank Governor."