The Cen­tral Bank of T&T yes­ter­day not­ed that that low­er for­eign cur­ren­cy con­ver­sions by en­er­gy-sec­tor com­pa­nies led to stranger de­mand for for­eign ex­change, which re­sult­ed in growth of for­eign cur­ren­cy bor­row­ings and a de­cline in for­eign cur­ren­cy de­posits.

In its Mon­e­tary Pol­i­cy Re­port for May 2024, the Cen­tral Bank said the sale of for­eign ex­change from the pub­lic (in­clud­ing en­er­gy com­pa­nies) to au­tho­rised deal­ers amount­ed to US$1.83 bil­lion over Jan­u­ary to May 2024, a de­crease of 8.5 per cent rel­a­tive to the same pe­ri­od a year ear­li­er.

T&T's mon­e­tary au­thor­i­ty and banker to the Gov­ern­ment said the de­cline in sale of for­eign ex­change to the au­tho­rised deal­ers for the first five months of 2024, fol­lowed a 13.1 per cent de­crease for the pe­ri­od Jan­u­ary to May 2023.

The de­cline in con­ver­sions by en­er­gy com­pa­nies led to an in­crease in for­eign cur­ren­cy bor­row­ing by com­pa­nies and in­di­vid­u­als for the pe­ri­od be­tween April 2023 and April 2024.

" On a year-on-year ba­sis, for­eign cur­ren­cy cred­it record­ed an in­crease of 25.4 per cent in April 2024...Over the pe­ri­od, de­spite a de­cel­er­a­tion in the growth of non­bank for­eign cur­ren­cy cred­it (32.1 per cent), com­mer­cial banks ramped up their sup­ply of for­eign cur­ren­cy cred­it (24.8 per cent)," said the Cen­tral Bank.

The Bank stat­ed that lend­ing to busi­ness­es in April 2024, grew by 33.4 per cent, from April 2023, not­ing that "anec­do­tal ev­i­dence sug­gests lend­ing was used as an av­enue to fill the gaps in for­eign cur­ren­cy mar­ket sup­ply."

Re­gard­ing for­eign cur­ren­cy de­posits, the Bank said there had been a 1.5 per cent ex­pan­sion in April 2024, com­pared to a year ear­li­er.

Busi­ness for­eign cur­ren­cy de­posits re­cov­ered in the fourth month of 2024 (3.5 per cent) af­ter en­ter­ing 2024 in neg­a­tive ter­ri­to­ry, though down from Oc­to­ber 2023 (13.4 per cent).

Con­sumer for­eign cur­ren­cy de­posits con­tin­ued to de­cline, de­spite im­prove­ments in the first four months of 2024. Com­pared to a 9.5 per cent con­trac­tion in Oc­to­ber 2023, con­sumer for­eign cur­ren­cy de­posits fell by 2.5 per cent in April 2024, ac­cord­ing to the Cen­tral Bank.

The pur­chase of for­eign ex­change from au­tho­rised deal­ers by the pub­lic reached US$2.37 bil­lion over the pe­ri­od Jan­u­ary to May 2024, a de­crease of 11.4 per cent rel­a­tive to the same pe­ri­od a year pri­or.

The net sales gap for the first five months of the year amount­ed to US$540.3 mil­lion dur­ing the pe­ri­od, with the Cen­tral Bank sell­ing US$500.0 mil­lion to au­tho­rised deal­ers.

The Cen­tral Bank al­so not­ed that ex­port earn­ings de­clined in the fourth quar­ter of 2023 as a re­sult of a re­duc­tion in en­er­gy ex­ports, un­der­pinned by low­er in­ter­na­tion­al com­mod­i­ty prices, and non-en­er­gy ex­ports.

"The de­cline in en­er­gy ex­port earn­ings was re­flect­ed across most en­er­gy com­modi­ties, of which the largest was petro­chem­i­cals (-46.7 per cent), fol­lowed by gas (-30.5 per cent), and pe­tro­le­um crude and re­fined prod­ucts (-6.1 per cent).

"Com­pound­ing this po­si­tion was a re­duc­tion in non-en­er­gy ex­ports, which fell by 18.0 per cent (year-onyear) to US$387.9 mil­lion, re­flec­tive of low­er in­ter­na­tion­al de­mand for do­mes­tic prod­ucts. To­tal ex­ports fell by 31.6 per cent (year-onyear) to US$2.35 bil­lion.