Senator: CBTT must ensure people get forex for medicine, sending children to school overseas

Gail Alexan­der

Since banks are now T&T’s new “mas­sas” and czars,” the Cen­tral Bank should en­sure there are reg­u­la­tions to make banks pro­vide for­eign ex­change to peo­ple who need to buy med­i­cine or send chil­dren to school over­seas, says In­de­pen­dent Sen­a­tor Dr Var­ma Deyals­ingh.

But Pub­lic Ad­min­is­tra­tion Min­is­ter Allyson West has said rather than dic­tate to banks, Gov­ern­ment tries to in­flu­ence how they do what they do – but didn’t think the state should step in and dic­tate to banks how to dis­trib­ute forex.

Nor would Gov­ern­ment de­val­ue the T&T cur­ren­cy, since that will cause im­port­ed in­fla­tion, she added.

Both spoke in the Sen­ate on Tues­day on a pri­vate mo­tion for Gov­ern­ment to lay in Par­lia­ment, with­in six months, a com­pre­hen­sive pol­i­cy frame­work that will guide key stake­hold­ers, in­clud­ing banks, on how Gov­ern­ment in­tends to nav­i­gate tight­ness in the forex mar­ket.

Deyals­ingh said while Gov­ern­ment has done a lot on forex is­sues, if banks are giv­en forex to dis­trib­ute, Gov­ern­ment is du­ty-bound to see if there are peo­ple grum­bling about short­ages and feel­ing dis­en­fran­chised.

He said some peo­ple go over­seas for treat­ments or send chil­dren to school over­seas, but some have to beg for forex and hu­mil­i­ate them­selves.

He said the Fi­nance Min­is­ter may not want to put re­stric­tions on banks but a pol­i­cy from Cen­tral Bank (CBTT) may be need­ed to di­rect that banks must ac­com­mo­date when peo­ple ap­ply for funds for health or uni­ver­si­ty rea­sons.

“This should be a CBTT reg­u­la­tion if Gov­ern­ment’s hes­i­tant to widen the scope of banks,” he added.

Deyals­ingh said in the 1970s Black Pow­er rev­o­lu­tion pe­ri­od, there were com­plaints about banks’ hir­ing prac­tices, which left a lot to be de­sired “Now, banks are the new czars in the game, the new mas­sas who con­trol who gets forex or not,” he said.

Jus­ti­fy­ing the term “czar,“he said in a par­lia­men­tary com­mit­tee meet­ing, a Bankers’ As­so­ci­a­tion vice pres­i­dent said bank man­agers de­ter­mined forex dis­tri­b­u­tion. There­fore, he said a pol­i­cy’s need­ed and banks may have to be told to lis­ten to these cas­es.

Deyals­ingh rec­om­mend­ed a so­cial jus­tice pol­i­cy for forex al­lo­ca­tions which shouldn’t be left to be guid­ed by the mar­ket alone. He sup­port­ed reg­u­la­tions for banks, which he said “have be­come mas­ters of their own right which might be a dis­ad­van­tage for the pop­u­la­tion.”

There should al­so be in­ves­ti­ga­tion of claims forex is be­ing sold on the black mar­ket and some peo­ple get a “cut.”

He added that as a doc­tor, it didn’t seem right to him that “it’s eas­i­er to bring in al­co­hol than reg­is­ter to bring in med­i­cines.”

Min­is­ter: De­val­u­a­tion will cause im­port­ed in­fla­tion

Min­is­ter West said dic­tat­ing to banks who to al­lo­cate forex will take T&T back to a time when Gov­ern­ment sought to con­trol many things in the econ­o­my which end­ed up floun­der­ing. To say Gov­ern­ment should con­trol who gets forex is to “take us down a path I don’t think we want to go … do we rein­tro­duce food price con­trol, wide­spread rental con­trol where does it end? That isn’t the way to go, in this ad­min­is­tra­tion’s view.”

In 2020, the CBTT es­ti­mat­ed forex sale to the pub­lic by au­tho­rised deal­ers was $4.5 bil­lion. West added the CBTT con­tin­ues in­ject­ing forex to im­prove sta­bil­i­ty and avail­abil­i­ty.

Ar­gu­ing against the “hair-on-fire crowd’s call for de­val­u­a­tion,” she said that would re­sult in im­port­ed in­fla­tion and T&T’s a sub­stan­tial im­porter, par­tic­u­lar­ly most food and med­i­cine.

She said Gov­ern­ment suc­cess­ful­ly man­aged the econ­o­my dur­ing the dif­fi­cult pan­dem­ic pe­ri­od and “we’re start­ing to emerge” from the most cat­a­stroph­ic ef­fect. But the war in Ukraine will bring in­creas­es in sev­er­al sta­ples’ prices.

West said Gov­ern­ment will take in­to con­sid­er­a­tion im­pact on cit­i­zens to pro­tect the vul­ner­a­ble from high price in­creas­es due to volatil­i­ty on the forex mar­ket.

She not­ed de­val­u­a­tion in Suri­name took their dol­lar from $7.5 to (US) $1 to $21, in­creas­ing cost of liv­ing and util­i­ty ser­vices by 90 per cent.

“These are the kind of sit­u­a­tions Gov­ern­ment’s try­ing to avoid,” she not­ed.