THE EDITOR: Finance Minister Colm Imbert has said TT is experiencing a forex shortage, not a crisis.
However this government tries to deny the truth, it is clear we are undergoing a forex crisis. Just ask the businessmen.
Everyone, especially businesses that require forex to buy their goods know there is a crisis. The minister and the Central Bank can spin it however they want, but they can’t hide the fact that banks are clamping down on releasing forex to their clients.
Recently, Republic Bank announced it was immediately cutting credit card US dollar transactions by half, from US$10,000 to US$ 5,000. This will have a drastic effect on many small and medium businesses (SMEs).
For over five years, businesses have been complaining that they can’t get sufficient forex and some have had no choice but to go to the black market to access the currency, in order to service their suppliers and obtain goods.
SMEs are absolutely critical to the economic health of TT and with this new burden in terms of credit card access to US dollars, we can expect serious fallout.
Republic Bank's actions are a sign of the times and other banks have reduced credit card access to forex in the past five years. Republic was one of the last local banks to have a US$10,000 limit – until a few days ago.
These SMEs depend largely on their credit card facility to purchase their foreign goods and pay their suppliers and they will surely suffer by the decision of the bank to reduce the facility.
The Government and the Central Bank have said nothing publicly about Republic Bank’s move to reduce its US dollar limit. This shows just how much the government really cares about the business community.
One can ask, what's next, is a devaluation of the TT dollar looming, despite repeated claims to the contrary?
If a devaluation would help the situation, many may very well prefer it instead of this level of hurt they are experiencing.
The minister keeps saying there is enough foreign reserves and the Heritage and Stabilisation fund is robust and that we are covered. But are we really?
Maybe a new spin could be to blame the Opposition for the forex shortage and blame them too for the current economic downturn. Many SMEs are sweating on the future given the forex shortage. Many questions remain ignored and unanswered. This is the reality and this is where we are now.
Port of Spain