DO NOT expect any relaxation in the Forex market in 2021.
« We believe it will be tight for at least 2021, » said central bank governor Alvin Hilaire last week on Wednesday.
Forex availability and reliability has been a sensitive issue for businesses for over six years.
Currently, T & amp; T Approximately USD 7.5 billion worth of goods (approx. TT $ 50 billion) per year, while it exports over USD 8 billion annually, mainly energy products. Foreign exchange earners sell US dollars to authorized dealers who in turn sell them to the public. Since this agreement did not satisfy the demand for foreign exchange, the central bank had to intervene in the market to sell « at least » about 100 million US dollars per month to the commercial banks.
« In the end it is more than that, because we have a so-called liquidity guarantee facility, which the banks also use, » said Hilaire in an exclusive interview with the Sunday Express in his office last week.
In 2020, the central bank sold $ 1.2 billion to T&A authorized forex dealers. T.
Hilaire, reappointed for a second term last December, said: “We are trying to explain this as best we can. We intervene, which means we regularly sell foreign exchange to the market. And our predictability is important in my opinion. «
He noted that, unlike some countries, T & T’s commercial banks are well aware that the central bank sells foreign currency every two weeks.
« How much do we do? Well, it depends on our assessment of the state of the international reserves. How do we estimate the inflows and outflows of foreign currencies? Our estimates of general market conditions, etc. We look at a number of things and decide. I think the central bank sold around $ 1.2 billion to the authorized dealers last year, ”he said.
However, foreign exchange revenues were impacted by the decline in energy prices and demand for certain goods as a result of the Covid-19 pandemic.
The governor said the central bank recognizes that there is « an imbalance in the currency market ».
He said, « It’s no secret, it’s been with us for a while. I would say for the past few years. Why is that? Because we had a combination of production problems in the energy sector and prices in the energy sector went down. This led to. » lower foreign exchange revenues, either directly from exports of these products or through government revenues, and then came Covid, which has now complicated this story on both the supply and the demand side, « he explained.
The country, he said, is currently in a difficult situation.
« The outlook is undoubtedly dominated by the coronavirus, » he said.
In explaining the country’s exchange rate, Hilaire noted that T & amp; T.
has taken various paths over the years – from a fixed interest rate to a managed IPO in April 1993 with devaluations in between.
Treasury Secretary Colm Imbert has made it clear that his government will not devalue the TT dollar for now.
Imbert told Spotlight on the Budget and Economy in September last year, “We continue to believe that devaluation will not serve any useful purpose, especially during this time when US dollar inflows are extremely low. And they’re extremely low because of Covid-19 because it has depressed oil and gas prices and oil and gas production. And that’s why the inflows that we recorded in 2018 and 2019 are now significantly lower.
“So if you devalue what happens? If you convert your US dollars to TT dollars at a higher rate, you will get more TT dollars. However, getting minimal inflows of US dollars will not be enough to counter the effects of the devaluation: increased raw material costs for your manufacturing sector; increased food import costs; Wage demands from unions who would naturally want a wage increase because the cost of living will rise; and your international debt service will increase because your external debt is in US dollars. «
Hilaire, for his part, referred to Barbados’ fixed exchange rate and the impact on this economy compared to the « floaters » like Guyana, Jamaica and T&T.
« Your exchange rate regime or your level is not as important as the coherence of policies and the way you work, » he said. He referred to a study by the International Monetary Fund looking at devaluations and devaluations in Latin America, in which the global lender of last resort concluded that large devaluations in these countries sometimes improve their external situation. For this to be successful, exports, which are now affected by trade and travel restrictions, must be increased.
“And that’s a problem in countries like Trinidad and Tobago, and to some extent Latin America, while in Asian countries their things are so flexible that as soon as they devalue their currency slightly they start selling more cars, start more Sell toys because they are able to employ manpower and capitalize on anything to make these things at a good price. And to take advantage of this thing.
“Currency devaluation may be useful depending on the circumstances, but it should be accompanied by other factors, including the capacity of your exports, to benefit from a better rate.
« So we spoke to the central bank in the area of the foreign exchange market that we needed an appropriate combination of monetary, fiscal and structural policy, » he said.
Hilaire observed that T & amp; T can easily delimit two periods in its reserve history.
« Let’s go back 20 years. In 2000 our international reserves were $ 1.3 billion and that steadily increased to $ 11.4 billion in 2014. At that point, nobody was talking about the foreign exchange market. Indeed It was the other way around when people asked why you are building up all these reserves because you don’t need them. Life is beautiful. « You could just put it on the market and let our exchange rate go where it was instead of six , and go on three or whatever. Whoever the government was at the time, I think in hindsight it was a really good thing because rainy days will be here. Now the reserves of $ 11.4 billion are up Up $ 6.8 billion, and the Heritage and Stabilization Fund (HSF) is likely the same (HSF was around $ 6 billion last September).
“Our main concern with the central bank is that you shouldn’t be misusing these buffers because they are finite and have an end. And this is where policymakers have to think very clearly: “Okay, I have this breathing space that is useful. But I have to be reasonable about it. Because I think about future generations. «
He said the government rightly tapped the HSF for $ 900 million last year « because it makes sense to have an umbrella and then get wet in the rain. » The HSF was founded in March 2007 and was preceded by the Interim Revenue Stabilization Fund in 2000.
Hilaire is also concerned about the Caribbean, which he described as « very, very stressed out ».
He said he was involved in regional meetings where Barbados Prime Minister Mia Mottley has a huge responsibility for external funding not only for vaccines but also for support for easy survival.
“We are blessed and have the flexibility to have these important buffers. The two most important ones are high international reserves, which today stand at about $ 6.8 billion, and the HSF, which stands at nearly $ 6 billion. These are massive buffers. And they allow us to make adjustments without hard, hard adjustments.
« If you talk to the other Caribbean leaders, they don’t have that sort of thing, they fight. I mean, some of them are in programs and their debts are going through the roof, so they are really on the verge. So we have to go after our Caribbean neighbors Look out and support them, « he said. He noted that Prime Minister Dr Keith Rowley is now Chairman of Caricom and he is optimistic that the Prime Minister will play a strong role in helping the region. » We need to look out for them because we saw the past in different circumstances, when we had to help somehow, when we had oil booms. An oil boom is a problem for us because high oil prices make us richer and create problems for them. So we have our problems, but when they have problems, that affects us, ”he said.
But he countered: “All of us in this matter together, I mean, the globe is facing a difficult situation, we have an internal circumstance that we have to address as a country. We will make it. We have buffers that are out there that many countries don’t, but we need to be sensible and band together to ride our way through this patch, ”he said.
What’s the cheapest way to buy US dollars?
5 cheap ways to exchange currency
- Stop by your local bank. Many banks and credit unions sell foreign currency. …
- Visit an ATM. …
- Consider receiving travelers checks. …
- Buy currency from your foreign bank branch. …
- Order currency online.
Where can I exchange large amounts of money?
You can use a bank or currency broker to convert large amounts of currency. The cost is a combination of exchange rates and transfer fees. Currency brokers can usually beat banks in terms of cost, but prices and fees vary depending on the amount.
Should you exchange money before going to Mexico?
It is recommended that you buy pesos before landing in Mexico just in case you need the money. According to this USA Today article, the most economical way to do it is by buying pesos from your bank in the US. Most banks do this for free, especially if you are not withdrawing a significant amount of money.
How much is $ 1 in Canada?
XE currency converter: 1 USD to CAD = 1.26265 Canadian dollars.
Is the Canadian Dollar Strong?
The strong / weak analyzer for the Canadian dollar puts it on a list of 7 as the strongest currency … Since the country’s main export is crude oil, the performance of crude oil in world markets – WTI and Brent crude – has a big impact the strength of the Canadian currency.
Why is US money worth more than Canadian?
Below is a graph that shows the correlation between oil prices and the CAD / USD exchange rate. … The reason the dollar is so low is that there is tremendous global demand for US dollars now AND the price of oil is hitting our economy. The flow of money in Canadian dollars is less.
Is It a Good Time to Convert CAD to USD?
For CAD to USD you can save up to $ 13,405.84 each year. « I have CAD and need to convert to USD every month to make a payment (s) … » If you wait until the first business day of each month (green above) and convert your CAD to USD, you will save USD 13,834.89 each time Year.
What is the best exchange rate?
If you plan ahead and want to exchange money in the US, your bank or credit union is your best bet. They have access to the best exchange rates and usually charge fewer fees than currency exchange offices. Most major banks sell foreign currency in person to customers in a local branch.
Which bank is best for changing money?
Local banks and credit unions usually offer the best interest rates. Big banks like Chase or Bank of America have the added benefit of having ATMs overseas. Online offices or currency converters like Travelex provide convenient foreign exchange services.
Can you exchange money at a post office?
What do I do with leftover currencies? Unused currencies can be exchanged for pounds sterling at selected post offices.
How much is 100 US Dollars in Canadian Dollars?
|US dollar / Canadian dollar conversion rates|
|10 USD||12,73400 CAD|
|20 USD||25,46800 CAD|
|50 USD||63.67000 CAD|
|100 USD||127.34000 CAD|
How much is 20 Canadian Dollars in US Dollars?
20 CAD to USD = 15.7732 US dollars.
When should I buy US dollars in Canada?
Try to stay away from the first and last business days within a month for the best value for money when converting US dollars to Canadian dollars. When averaging the dollar cost, take some time to plan several evenly averaged conversions that you will complete in a week.
What is the lowest Canadian dollar?
On January 21, 2002, the Canadian dollar hit its all-time low against the US dollar, falling to 61.79 cents (US).