PE­TER CHRISTO­PHER

Se­nior Mul­ti­me­dia Re­porter

pe­ter.christo­pher@guardian.co.tt

For­eign ex­change spend­ing via cred­it card us­age has in­creased by over US$1.5 bil­lion dol­lars in the past decade.

This was re­vealed by Cen­tral Bank Gov­er­nor Lar­ry Howai dur­ing his en­gage­ment with the me­dia at the Cen­tral Bank yes­ter­day.

He said, “What I have to say is that cred­it cards were us­ing US$765 mil­lion a year of our for­eign ex­change re­serves back in 2015. It is now (2024) US$2,317 mil­lion. Now $2,000 mil­lion is plen­ty mon­ey, right? And that is US dol­lars that we are spend­ing abroad as cit­i­zens on an on­go­ing ba­sis. So this has been a very sig­nif­i­cant in­crease.”

That would rep­re­sent close to 40 per cent of T&T’s for­eign ex­change de­mand an­nu­al­ly.

The gov­er­nor said the in­crease in use of cred­it card al­so re­flect­ed the shift in the con­sump­tion pat­terns con­cern­ing for­eign ex­change in the coun­try.

“Now to be fair, a lot of it al­so re­flects move­ments from oth­er sec­tors. And what I mean by that is that if you look at re­tail and dis­tri­b­u­tion, it was US$1.7 bil­lion in 2015 and it was US$861 mil­lion in 2024. But a lot of it is al­so now go­ing through cred­it cards as op­posed to go­ing through here (com­mer­cial banks).”

Last No­vem­ber, for­mer Fi­nance Min­is­ter Colm Im­bert not­ed that cred­it card us­age has in­creased by 50 per cent since 2019. Im­bert re­vealed this af­ter he be­gan to seek in­for­ma­tion con­cern­ing the for­eign ex­change sit­u­a­tion af­ter sev­er­al lo­cal banks an­nounced for­eign ex­change lim­it re­duc­tions last year.

Banks have con­tin­ued to re­duce the for­eign ex­change lim­it on their cred­it cards this year, with Re­pub­lic Bank re­duc­ing its lim­it by 50 per cent to US$2500 last month.

Howai could not state if there would be any ad­just­ments made by the Cen­tral Bank ahead of the Di­vali and Christ­mas pe­ri­od which could see fur­ther de­mand for for­eign ex­change ahead of the shop­ping sea­sons as­so­ci­at­ed with those pe­ri­ods.

How­ev­er he ac­knowl­edged that those were sea­sons of high de­mand. Howai, how­ev­er, was hope­ful the coun­try would re­ceive pos­i­tive in­flows that could ad­dress the de­mand dur­ing those pe­ri­ods.