'TT$
will stay pegged to US$'
Pot Spain
Petroleumworldtt.com
11 18 07
DESPITE the recent decline of the United States dollar against other international
currencies, Central Bank governor Ewart Williams has said the Trinidad and
Tobago dollar will remain pegged to the greenback.
As US currency depreciates on the world market,
so too does the TT dollar because of the peg.
Recently, there has been a sharp increase in the
exchange rate between the TT dollar and the pound
sterling, the Euro and the Canadian dollar.
To buy a pound sterling now costs about TT$13.50
and to buy a Canadian dollar costs TT$7.
Williams,
speaking at the launch of the Monetary Policy
Report October 2007 on Monday, said: "Consumers
that have payments in pounds or in euro are hurting
because they now need to find more TT dollars.
"Our
import structure is heavily dependent on the
US. Forty per cent of our imports come from
the US but I think about ten to 15 per cent come
from a combination of the euro and the pound, so
it means that ten or 15 per cent of our imports
are affected by the depreciation of the TT dollar."
While the International Monetary Fund has called
for the re-evaluation of the local currency, Williams
said that the country had good reason to remain
pegged to the US, and the depreciation of TT dollar
against other currencies may be to the benefit
of the local export sector.
"The long-term objective of the economy is
economic diversification, which means what we want
to do is create non-energy sources of exports.
If you want to help non-energy sectors to export
then you are doing exactly the opposite by appreciation
(of the TT dollar)," Williams said.
He said that the TT dollar could be allowed to
depreciate so that local exports are able to find
markets abroad and this is particularly important
now as domestic inflation is undermining competitiveness.
Exporters are also facing increased costs in transportation,
security and other areas, so with a lower value
currency they will be able to compete in the global
market.
Story
by Driselle
Ramjohn from
Trinidad Express
dramjohn@trinidadexpress.com
Trinidad
Express
Wednesday, November 14th 2007
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