PE­TER CHRISTO­PHER

Se­nior Mul­ti­me­dia Re­porter

pe­ter.christo­pher@guardian.co.tt

Prime Min­is­ter Stu­art Young has stat­ed that he will re­sist calls to float the TT dol­lar, de­spite sug­ges­tions from econ­o­mists to do so.

On Wednes­day night, speak­ing at a cam­paign meet­ing, Young ar­gued that the op­po­si­tion Unit­ed Na­tion­al Con­gress would ex­pose the coun­try to an ex­change rate of TT$15 to US$1 giv­en their cam­paign plans.

"We will de­fend the ex­change rate, be­cause we know if they get rid of it and put it on a pure float­ing rate, that it will end up at $15 to US$1. And that im­me­di­ate­ly means the im­por­ta­tion of every­thing in­to T&T is dou­ble the price as I demon­strat­ed with a few items last night. So our pol­i­cy and our de­ci­sion as a PNM is we will con­tin­ue to de­fend the cur­rent rate of the $6.80, the $6.90.. It is an op­tion as we saw the UNC's pol­i­cy is to com­plete­ly get rid of the float­ing rate that leads you to $15 to US$1.

"That means every­thing that is im­port­ed im­me­di­ate­ly costs twice as much when your salary does not move in that di­rec­tion,' said the Prime Min­is­ter when asked about his re­luc­tance to con­sid­er de­valu­ing the dol­lar amid the cur­rent for­eign ex­change con­straints.

He said, "The on­ly way that the bas­ket of what the UNC is hold­ing out to the pop­u­la­tion can be af­ford­ed is what we know as a de­val­u­a­tion and it will lead to a $15 to US$1 de­val­u­a­tion as well as end up at the IMF (In­ter­na­tion­al Mon­e­tary Fund. "

He not­ed the Bar­ba­dos had adopt­ed a sim­i­lar pol­i­cy for decades de­spite be­ing un­der an IMF pro­gramme.

"(There are) dif­fer­ent poli­cies a gov­ern­ment takes. Let's look at Bar­ba­dos for ex­am­ple; Bar­ba­dos has a pol­i­cy de­ci­sion that they're go­ing to de­fend their dol­lar that they've done for decades at BD$2 to US$1, de­spite be­ing in IMF pro­grammes. That's a Bar­ba­di­an pol­i­cy," said Young at the press con­fer­ence.

The Prime Min­is­ter said while the move might in­crease the re­turns of ex­ports, that ap­proach would de­crease the spend­ing pow­er of the av­er­age cit­i­zen giv­en the price of im­port­ed goods would like­ly in­crease.

"Your salary doesn't go up when the ex­porter makes more mon­ey. So your cost of liv­ing goes up, the in­fla­tion goes up if you're earn­ing $3,000 a month that could buy $3,000 worth of goods to­day. At $15 to $1 you go in­to the su­per­mar­ket to­mor­row and that $3,000 is now on­ly re­al­ly worth in re­al val­ue $1,500. And that is what, I as Prime Min­is­ter, will con­tin­ue to de­fend the pop­u­la­tion of Trinidad and To­ba­go (from). I am not pre­pared to make a de­ci­sion with the gov­ern­ment to de­val­ue to 15 to one," said Young.