Lack of forex affecting business sector

Finance Minister Colm Imbert - File photo by Ayanna Kinsale
Finance Minister Colm Imbert - File photo by Ayanna Kinsale

The impact of limited foreign exchange (forex) is being felt by local shoppers, especially small businesses.

Another factor is that Republic Bank announced a reduction in its credit-card spending limit to US$5,000 from US$10,000 per billing cycle with effect from Thursday.

This is the second reduction in two years; in 2021, the bank reduced its US$12,000 limit to US$10,000.

In a statement on Sunday, Finance Minister Colm Imbert said the sales of foreign exchange to the public for the first seven months of 2023 had been almost the same as the amount of forex available to the public in the first seven months of 2022, and there could be deeper issues affecting the availability of forex currently.

His comments stemmed from a Sunday newspaper editorial.

He added that supply had been reduced as the repatriation of forex earned through exports has decreased.

A small business owner, Sectie Singh of Sugar Art Cake Studio, said the new limit of US$5,000 will affect her business for varying reasons.

"For me, the main one (is) being unable to cover travel costs – flights and accommodation – paying for training courses, which can be on the higher end, and buying needed supplies for my business, as this doesn’t leave you with much, given the new limit restriction," she said in a WhatsApp exchange with Newsday.

Training, for her, she said, can be upwards of US$2,000, including travel and accommodation.

Singh offered a suggestion: "Instead of a monthly cap, the bank should reconsider a yearly cap with a consolidated amount."

President of the Fyzabad Chamber of Commerce Angie Jairam said these forex issues are not new, but retailers will be greatly affected. She touched on the medical field, which imports the majority of its resources.

"Our imports are really high, and the reason for that is we are really not manufacturing a lot of what we use, and the government needs to encourage these things. Do not make it difficult, help the small to medium enterprises to be able to drive themselves to exporting, so that they can bring in foreign currency."

Jairam added that her business in the medical field supplies medical equipment from operating tools to hospital beds. It spends TT's forex, but with the skills the company possesses, forex is also returned to the economy.


"Lack of forex affecting business sector"

More in this section