Cen­tral gov­ern­ment and three state en­ter­pris­es raised over $14 bil­lion in debt be­tween Oc­to­ber 2023 and June 2024, ac­cord­ing to in­for­ma­tion from the Cen­tral Bank’s May 2024 Mon­e­tary Pol­i­cy Re­port and from the Min­istry of Fi­nance.

The Gov­ern­ment and the state en­ter­pris­es is­sued bonds to­talling $9.17 bil­lion on the do­mes­tic cap­i­tal mar­ket mon­ey and US$750 mil­lion ($5.06 bil­lion) on the in­ter­na­tion­al cap­i­tal mar­ket. On June 17, the Gov­ern­ment is­sued the 10-year US$750 mil­lion bond, at an in­ter­est rate of 6.40 per cent.

In its lat­est Mon­e­tary Pol­i­cy Re­port, the Cen­tral Bank in­di­cat­ed that its pro­vi­sion­al da­ta sug­gest­ed that for the eight months end­ing May 2024, the pri­ma­ry debt mar­ket record­ed 14 bond is­sues, rais­ing $9.17 bil­lion.

“The Gov­ern­ment was the pri­ma­ry bor­row­er, is­su­ing 11 bonds at $8.07 bil­lion via pri­vate place­ments, while three state en­ter­pris­es fi­nanced $1.10 bil­lion,” the re­port stat­ed.

The three state en­ter­pris­es are the Hous­ing De­vel­op­ment Cor­po­ra­tion, which raised $500 mil­lion in Feb­ru­ary 2024 and the Na­tion­al In­vest­ment Fund Hold­ing Com­pa­ny, which raised $400 mil­lion, al­so in Feb­ru­ary. First Cit­i­zens In­vest­ment Ser­vices Ltd, which is a 100-per cent sub­sidiary of First Cit­i­zens Group Fi­nan­cial Hold­ings, raised US$30 mil­lion ($202.5 mil­lion in Oc­to­ber 2023. The First Cit­i­zens Group is owned 60.11 per cent by Cor­po­ra­tion Sole, in whose name state as­sets are held.

The Cen­tral Bank re­port states that “over the pe­ri­od (Oc­to­ber 2023 to May 2024), the Gov­ern­ment ac­cessed the mar­ket for bud­get sup­port and the re­pay­ment of ex­ist­ing fa­cil­i­ties,” but did not pro­vide a break­down of the two cat­e­gories.

But in his June 3, 2024 af­fi­davit on the T&T Rev­enue Au­thor­i­ty mat­ter, Min­is­ter of Fi­nance, Colm Im­bert sig­nalled that T&T’s deficit for the 2024 fis­cal year could be as high as $9 bil­lion.

“The fall in oil and gas prices and low­er than ex­pect­ed pro­duc­tion of oil and gas has had a pro­found im­pact on the coun­try’s pe­tro­le­um rev­enues, lead­ing to a pro­ject­ed short­fall in rev­enue for 2024 of $5 bil­lion. When this sig­nif­i­cant short­fall is added to the ini­tial­ly es­ti­mat­ed bud­get of $5 bil­lion, even with ad­di­tion­al one-off rev­enues from as­set sales, the coun­try’s deficit for 2024 is now ex­pect­ed to be as high as $9 bil­lion,” said Im­bert.

The Mon­e­tary Pol­i­cy Re­port al­so said that for the com­pa­ra­ble pe­ri­od one year ear­li­er, from Oc­to­ber 2022 to May 2023, the lo­cal cap­i­tal mar­ket “record­ed nine bond is­sues rais­ing a to­tal of $5.84 bil­lion, with the Gov­ern­ment ac­count­ing for five bonds at $4.73 bil­lion.” The mon­ey raised by the Gov­ern­ment in the first eight months of the 2024 fis­cal year is 70.6 per cent more than was raised in the same pe­ri­od in the 2023 fis­cal year.

Last Fri­day, in a sur­prise move,the Cen­tral Bank an­nounced that it was re­duc­ing the pri­ma­ry re­serve re­quire­ment of com­mer­cial banks from 14 per cent to 10 per cent of pre­scribed li­a­bil­i­ties with ef­fect from the re­serve week be­gin­ning Ju­ly 24, 2024.

Asked by Guardian Me­dia on Sun­day what ac­count­ed for the de­cline in the ex­cess re­serves, which led the Cen­tral Bank to cut the re­serves re­quire­ment, the in­sti­tu­tion said: “There does not seem to have been one dom­i­nant fac­tor (and the sit­u­a­tion var­ied across banks), but it is re­lat­ed to com­mer­cial banks fi­nanc­ing of the Gov­ern­ment and the ex­pan­sion of cred­it to the pri­vate sec­tor— both fac­tors have been grow­ing in re­cent months.”

The Cen­tral Bank al­so said in prin­ci­ple the de­cline in ex­cess re­serves could have been dealt with by greater re­liance on open mar­ket op­er­a­tions, “but the change in the re­serve re­quire­ment gives an im­me­di­ate large im­pact and of­fered the Cen­tral Bank the op­por­tu­ni­ty to move fur­ther to­wards more mar­ket-de­ter­mined in­stru­ments.”