Geisha Kow­lessar-Alon­zo

Se­nior mul­ti­me­dia re­porter

geisha.kow­lessar@guardian.co.tt

The eyes of many busi­ness­peo­ple and or­di­nary cit­i­zens will be fo­cussed on White­hall to­day as the Gov­ern­ment meets with mem­bers of the bank­ing sec­tor to pave the way for­ward in tack­ling this coun­try's con­tin­ued forex cri­sis.

Speak­ing at his first post-Cab­i­net news con­fer­ence at White­hall, Port-of-Spain last Thurs­day Young shared de­tails about this plan.

"Next week Tues­day (to­mor­row), at 2:30pm, I have in­vit­ed the Cen­tral Bank and the Banker’s As­so­ci­a­tion of Trinidad and To­ba­go (BATT), and I’m hop­ing all the chief ex­ec­u­tive of­fi­cers of the banks that op­er­ate in Trinidad and To­ba­go to meet with my­self and the Min­is­ter of Fi­nance, Sen­a­tor Vish­nu Dhan­paul, right here at White­hall be­cause I in­tend to ad­dress im­me­di­ate­ly, the is­sue of for­eign ex­change and al­lo­ca­tion of forex.”

Young, who con­tin­ues to holds the port­fo­lio of En­er­gy Min­is­ter, ad­mit­ted that T&T does not now earn the amount of for­eign ex­change that used to flow in­to the coun­try's cof­fers.

"We have less for­eign ex­change than we used to. That is the fact of life. How­ev­er, how do we look at the al­lo­ca­tion of the for­eign ex­change that is avail­able to us among our cit­i­zens of Trinidad and To­ba­go?" the PM asked.

The avail­abil­i­ty of for­eign ex­change has been a peren­ni­al prob­lem for more than 10 years, not on­ly for the busi­ness com­mu­ni­ty but al­so or­di­nary cit­i­zens look­ing to go on hol­i­day abroad, fund the ed­u­ca­tion of their chil­dren or pay for over­seas health­care.

Last No­vem­ber, then Fi­nance Min­is­ter Colm Im­bert an­nounced plans to con­sult with stake­hold­ers on chang­ing the method for al­lo­cat­ing for­eign ex­change.

The dis­cus­sion was aimed at achiev­ing a path to­ward eq­ui­table dis­tri­b­u­tion.

Im­bert had ex­plained that for 25 years, an “ho­n­our sys­tem” has been in place for the dis­tri­b­u­tion of forex by com­mer­cial banks in T&T.

How­ev­er, with busi­ness­es clam­our­ing for more for­eign ex­change to be made avail­able, Im­bert said there could be a pos­si­ble plan to “reg­u­larise” how this sys­tem is done.

In ex­plain­ing the “ho­n­our sys­tem,” Im­bert had said, “It is ex­pect­ed that banks would ex­er­cise re­spon­si­bil­i­ty, eq­ui­ty, jus­tice, and all that sort of thing in the dis­tri­b­u­tion. They can go to the oth­er ex­treme, which they have not done yet, where they can par­tic­u­larise, for ex­am­ple, that a per­cent­age of this US$100 mil­lion that is put in every month should go to small and medi­um en­ter­pris­es, should go to ed­u­ca­tion, should go to med­ical ex­pens­es, should go to trav­el, should go to im­ports for man­u­fac­tur­ing.”

He had al­so ex­plained that when tax­es are paid in US dol­lars, they go in­to a spe­cial ac­count at the Cen­tral Bank, which con­sti­tutes the Gov­ern­ment’s for­eign re­serves.

The Cen­tral Bank, Im­bert said, in­ter­venes every two weeks in the for­eign ex­change mar­ket, sell­ing about US$50 mil­lion for­eign ex­change to com­mer­cial banks. This is based on a for­mu­la that takes in­to ac­count the size of the bank, num­ber of branch­es, and cus­tomers, among oth­er fac­tors, en­sur­ing that each bank gets a pro­por­tion of that amount.

He added that part of the dis­tri­b­u­tion process, as stip­u­lat­ed by the Cen­tral Bank, is the rate at which the banks can sell the for­eign ex­change, as well as a pref­er­ence for trade and busi­ness.