Amer­i­can Cham­ber of Com­merce CEO Ni­rad Tewarie says Gov­ern­ment in­ter­ven­tion in­to the on­go­ing for­eign ex­change short­age is long over­due.

Tewarie made the com­ment yes­ter­day in the wake of an an­nounce­ment by Fi­nance Min­is­ter Colm Im­bert that he would soon meet with busi­ness on the is­sue.

For­eign ex­change chal­lenges, Tewarie added, have been mount­ing for some time, with busi­ness­es con­sis­tent­ly see­ing re­duced sup­ply.

“Over the last cou­ple months, many busi­ness­es have been com­plain­ing about an acute short­age of for­eign ex­change. Com­pa­nies that used to man­age with small­er than need­ed al­lo­ca­tions saw even that ac­cess cur­tailed,” Tewarie said. He ex­plained that this could be par­tial­ly con­nect­ed to a re­duced amount of for­eign ex­change be­ing sold to au­tho­rised for­eign ex­change deal­ers, in­clud­ing the banks, by the up­stream en­er­gy and pe­tro­le­um com­pa­nies in re­cent months.

“These com­pa­nies were able to ac­cess Gov­ern­ment-is­sued VAT bonds for large, out­stand­ing amounts of VAT owed to them over sev­er­al years. They cashed these TT dol­lar bonds at the banks and now have enough lo­cal cur­ren­cy to pay lo­cal ex­pens­es. For sev­er­al, this ad­di­tion­al source of TT dol­lars will car­ry them in­to Q1 or Q2 of cal­en­dar 2024,” he said.

The short­age, cou­pled with the “un­at­trac­tive” prospect of sell­ing US col­lars to the lo­cal mar­ket, has cre­at­ed a harsh re­al­i­ty for many busi­ness­es, the AM­CHAM CEO ex­plained.

He said, “It is past time that the Gov­ern­ment se­ri­ous­ly and col­lab­o­ra­tive­ly sets medi­um term tar­gets and im­ple­ments the rel­e­vant pol­i­cy mea­sures to ad­dress the chron­ic for­eign ex­change short­age in T&T. Our econ­o­my is, af­ter all, the largest in the Eng­lish-speak­ing Caribbean. It al­so has the largest fi­nan­cial sec­tor. We can­not con­tin­ue in this man­ner. “

Tewarie said a size­able in­jec­tion of for­eign ex­change was need­ed in­to the fi­nan­cial sys­tem, and al­so urged the Min­istry of Fi­nance to pay out VAT re­funds ur­gent­ly, as he not­ed that “many en­er­gy com­pa­nies have about 50 per cent of their VAT re­funds to be set­tled.”

“It is like­ly that those who dis­agree with this po­si­tion will dis­miss it by say­ing that the pri­vate sec­tor has to earn more for­eign ex­change. This is true. How­ev­er, it would be ir­ra­tional for those who do earn more for­eign ex­change to bring it back to the lo­cal sys­tem in a sce­nario in which both the re­turns that are like­ly to be earned on that cap­i­tal are low and there is a pos­si­bil­i­ty that when that for­eign ex­change is need­ed it may be in­ac­ces­si­ble, if even for a pe­ri­od of time.”

Tewarie said he was heart­ened to see Im­bert ex­press a will­ing­ness to work with the Cen­tral Bank and busi­ness com­mu­ni­ty to come up with so­lu­tions.

Mean­while, oth­er busi­ness cham­bers echoed con­cerns raised about the im­pact Re­pub­lic Bank’s US dol­lar cred­it card lim­it re­duc­tion would have on small busi­ness­es head­ing in­to the Christ­mas sea­son.

“Cut­ting down on what’s avail­able to the small and medi­um en­ter­pris­es, which is 70 per cent of our mem­ber­ship, re­al­ly is a lit­tle bit of a blow be­cause these peo­ple use their cred­it cards. They don’t have the fa­cil­i­ties that larg­er com­pa­nies have. So they use their cred­it cards large­ly to pay all the in­voic­es from away and to have it cut in half in the event of the Re­pub­lic bank change. It re­al­ly is a se­vere blow to them be­ing able to ex­pand on their busi­ness in­ter­ests,” Trinidad and To­ba­go Cham­ber of Com­merce CEO Stephen De Gannes said.

Fyz­abad Cham­ber pres­i­dent Ang­ie Jairam called for more struc­tured re­duc­tion, as she too not­ed that sev­er­al small busi­ness­es re­lied on cred­it cards to clear their im­ports.

“We have to do cer­tain things in or­der to im­prove (the forex sit­u­a­tion) but a re­duc­tion that big, a de­crease of $5,000. I mean, there are some of us bring­ing in US to the coun­try, but there are lots of busi­ness­es who are small busi­ness­es es­pe­cial­ly, they de­pend on this. And I think there should be a more struc­tured way of do­ing this,” Jairam said.

San Juan Busi­ness As­so­ci­a­tion pres­i­dent Abrahim Ali feared the change could have a rip­ple ef­fect on busi­ness­es and em­ploy­ment.

“You have small and mi­cro busi­ness­es at fur­ther risk of clo­sures. And it’s a deep con­cern. It’s a deep con­cern for em­ploy­ment. There’s a deep con­cern for the sur­viv­abil­i­ty of busi­ness­es. And you know the bud­get, we are with­in it but the bud­get is two weeks away.

“What do we do in the mean­time, what hap­pens with the Christ­mas sea­son that is ap­proach­ing?” asked Ali.