Fi­nance Min­is­ter Colm has said Trinidad and To­ba­go has enough for­eign re­serves to de­fend the T&T dol­lar for the next ten years.

In a let­ter to the ed­i­tor Im­bert said, “In the face of over US$13 bil­lion avail­able to the Gov­ern­ment to de­fend the ex­change rate, which is suf­fi­cient to keep our ex­change rate sta­ble for over 10 years, and the Gov­ern­ment’s clear­ly stat­ed pol­i­cy of de­fend­ing our ex­change rate, Fitch So­lu­tions’ so-called warn­ing of a de­val­u­a­tion was un­in­formed and ir­re­spon­si­ble, es­pe­cial­ly since any de­ci­sion to de­val­ue the cur­ren­cy is a Gov­ern­ment de­ci­sion.”

The Fi­nance Min­is­ter was re­spond­ing to the Sun­day Guardian’s ed­i­to­r­i­al which called on the Min­is­ter to fo­cus on grow­ing the econ­o­my and not­ed that Fitch So­lu­tions, which is an as­so­ciate of Fitch Rat­ings Inc and part of the Fitch group, had pre­dict­ed a de­val­u­a­tion of the T&T dol­lar.

Im­bert again in­sist­ed that Fitch Rat­ings Inc was not con­tract­ed to do a coun­try risk re­port for Trinidad and To­ba­go and did not warn of a de­val­u­a­tion.

“Fur­ther, Fitch So­lu­tions is not a cred­it rat­ing agency and has had no in­ter­ac­tion with the au­thor­i­ties in Trinidad and To­ba­go, nor any ac­cess to of­fi­cial da­ta,” he ar­gued.

Fitch So­lu­tions is a rep­utable or­gan­i­sa­tion that pro­vides coun­try analy­sis based on pub­licly avail­able da­ta and does not have to con­fer with its af­fil­i­ate Fitch Rat­ings Inc to pro­vide coun­try analy­sis.

Fitch So­lu­tions’ re­port in­sist­ed that in the medi­um term the Cen­tral Bank can­not con­tin­ue to de­fend the T&T dol­lar. It not­ed that its analy­sis was based on the fact that the coun­try’s ex­ter­nal ac­counts re­main weak and there will con­tin­ue to be greater out­flows than in­flows for cur­ren­cy.

“We main­tain our view that the CBTT will de­val­ue the dol­lar over the medi­um term. Our fore­casts as­sume a de­val­u­a­tion to TTD8.00/USD by end-2019. Our view is un­der­pinned by an ex­pec­ta­tion that T&T’s ex­ter­nal ac­counts will re­main weak, keep­ing the peg un­der down­side pres­sure.”

It added, “The rise in dol­lar sales over re­cent months ap­pears to be un­der­pinned in part by the sale of for­eign re­serves. By end-2018, for­eign re­serves had con­tract­ed 9.5% Year on Year (y-o-y) and 34.1% since peak­ing at end-2014.”

Since Im­bert has be­come Fi­nance Min­is­ter the coun­try’s net of­fi­cial re­serves have fall­en by close to a quar­ter.

The Cen­tral Bank’s Jan­u­ary 2019 eco­nom­ic bul­letin paint­ed a pic­ture of the falling re­serves.

It read, “Trinidad and To­ba­go’s gross of­fi­cial re­serves amount­ed to $7,575.0 mil­lion at the end of De­cem­ber 2018; $794.7 mil­lion low­er than the lev­el record­ed at the end of 2017. This por­tends an over­all deficit on the ex­ter­nal ac­counts. The lev­el of re­serves at the end of De­cem­ber 2018 rep­re­sents 8.0 months of prospec­tive im­ports of goods and ser­vices, com­pared to the im­port cov­er of 9.7 months at the end of 2017. At the end of Sep­tem­ber 2018, gross of­fi­cial re­serves amount­ed to $7,465.3 mil­lion or 8.1 months of prospec­tive im­ports of goods and ser­vices.”

The Cen­tral Bank re­port­ed that at the end of 2015 the coun­try’s net of­fi­cial re­serves was $9.933 bil­lion. It means that since Im­bert has been min­is­ter of fi­nance the coun­try’s net of­fi­cial re­serves have fall­en by $2.358 bil­lion or by 23 per cent in a three year pe­ri­od.

Sev­er­al econ­o­mists and the in­ter­na­tion­al agen­cies have coun­selled the Gov­ern­ment to al­low the ex­change rate to de­pre­ci­ate to where it will find its equi­lib­ri­um and its re­al val­ue but so far the Gov­ern­ment has been ret­i­cent that it will not al­low the dol­lar to fall be­yond the present val­ue.