Foreign Exchange Market Conditions Remain Tight in Trinidad and Tobago

Foreign Currency Credit and Deposits

The Central Bank of Trinidad and Tobago (CBTT) has reported that foreign exchange market conditions remained tight and have continued to influence the outturn for foreign currency credit and deposits this year. In its November Monetary Policy Report, the CBTT said the growth rate of foreign currency credit, though still robust, decelerated slightly, recording a year-on-year increase of 23.8 percent in September 2024, down from 25.4 percent in April.

Commercial Bank Foreign Currency Lending

Commercial bank foreign currency lending picked up pace, recording a year-on-year increase of 24.9 percent in September 2024. However, the growth in non-bank foreign currency lending slowed considerably, recording a year-on-year increase of 10.3 percent.

Foreign Currency Credit to Businesses

Regarding foreign currency credit to businesses, an increase of 30.7 percent was observed in September 2024, down from 33.4 percent in April 2024. The CBTT said that based on prudential indicators it is monitoring, the growth observed in foreign currency lending currently does not suggest a buildup in financial risks.

Foreign Currency Deposit Growth

Foreign currency deposit growth accelerated over the period after recovering in April, recording a year-on-year increase of 7.5 percent in September 2024. The growth in business foreign currency deposits gradually accelerated over the period, reaching 5.6 percent in September 2024. Consumer foreign currency deposits continued to decline but at a slower pace, recording a year-on-year decrease of 1.8 percent in September 2024.

Foreign Exchange Market Conditions

Foreign exchange market conditions remained tight thus far this year. Purchases of foreign exchange by authorized dealers from the public amounted to US$3,725.5 million over January to October 2024, a decrease of 0.7 percent relative to the same period a year earlier. The marginal decrease in purchases followed a 0.3 percent rise in conversions by energy companies relative to the same period in 2023.

Sales of Foreign Exchange

Sales of foreign exchange by authorized dealers to the public reached US$4,927.4 million from January to October 2024, a decrease of 5.7 percent relative to the same period a year prior. The net sales gap reached US$1,201.8 million during the period. The Central Bank sold US$1,075.0 million to authorized dealers to support the market.

Conclusion

In conclusion, foreign exchange market conditions in Trinidad and Tobago remained tight in 2024, influencing the outturn for foreign currency credit and deposits. The growth rate of foreign currency credit decelerated slightly, while foreign currency deposit growth accelerated over the period.

FAQs

Q: What is the current state of foreign exchange market conditions in Trinidad and Tobago?
A: Foreign exchange market conditions remain tight in Trinidad and Tobago.

Q: What is the growth rate of foreign currency credit in Trinidad and Tobago?
A: The growth rate of foreign currency credit decelerated slightly, recording a year-on-year increase of 23.8 percent in September 2024.

Q: What is the growth rate of foreign currency deposit growth in Trinidad and Tobago?
A: Foreign currency deposit growth accelerated over the period, recording a year-on-year increase of 7.5 percent in September 2024.

Q: What is the net sales gap in Trinidad and Tobago?
A: The net sales gap reached US$1,201.8 million during the period.