Prime Minister Dr Keith Rowley is insisting his Government has no intention of devaluing the T&T dollar.
However, Finance Minister Colm Imbert says if T&T imports continue to exceed its export we could find ourselves in problems.
Rowley made the comment at a press conference at the Hyatt Regency, following Government’s consultation on the state of the economy, in response to questions on whether devaluation was ahead given the high consumption by citizens coupled with low foreign exchange reserves for Government.
But Rowley said that was not a matter for him at “this point in time” but for Imbert.
“But I am not treating with any devaluation. What I was speaking to was the whole question of how we manage our foreign exchange…it’s availability and utilisation, given the fact that the stream of foreign exchange has considerably been reduced and the short to medium term would be in that situation, so how we treat with it, so whoever is minister of finance in Trinidad and Tobago, that is part of his job. So let us see what he does,” Rowley said.
Rowley said T&T had already borrowed $7 billion.
“And that is…most of it is in foreign exchange. A significant portion of that has to be paid in US dollars. So if you keep on borrowing externally without an eye on how you are going to repay, and you get yourself to a point when that foreign debt is due you don’t have the foreign currency to pay, that is calamity you must avoid at all cost,” Rowley said.
Imbert then interjected, saying he learnt at the discussion that imports had exceeded exports in terms of dollar value.
“That is an untenable situation. The point the Prime Minister is making, we cannot continue like this. If we cannot suppress demand so that the value of import falls below the value of exports, then there would be so much pressure on the exchange rate that inevitably there would have to be some movement. But the Prime Minister was not saying remotely, even indirectly, that there was a devaluation that is going to take place,” Imbert said.
Imbert said we are now spending more US dollars than we are earning and reserves are depleting, while there was so much they can do in going to the international market to borrow.
“We have almost maxed out there as far as I am concerned,” Imbert said.
He also gave an update into the winding up of CL Financial, saying the liquidators were now in place.
“They would now go through the process of an orderly liquidation of CL Financial, primarily to repay the $15 billion of taxpayers money that was put into this private company.”
The total figure injected into Cl Financial was $23 billion, he said.
“We have recovered about $8 billion so we are looking at $15 billion of the people’s money that was put into a private company. We in the Government are looking at what we should do with the assets held by CL Financial group as the liquidation takes place.”
He said more information on CL Financial will be announced in Monday’s budget presentation.