Trinidad and Tobago’s foreign exchange (forex) challenges have deepened, with businesses now facing added strain from the suspension of the Export-Import Bank’s (Exim Bank’s) Foreign Exchange Facility.
President of the T&T Chamber of Industry and Commerce Sonji Pierre-Chase told Express Business in an e-mailed response that the situation has created urgent concerns, especially for small and medium enterprises in the manufacturing and service-based industries.
Economist Marla Dukharan
“Members expressed widespread concern over the ongoing forex challenges. Responses from our members on a recent survey we conducted on the impact of the decrease in credit card limits described the environment as:
• ‘Very negative. The limit is way too small to allow for basic online purchases or international subscriptions.’
• ‘This situation has further increased the financial strain on our business.”
• ‘A challenge to our business’.”
Pierre-Chase noted that members described the restrictions as “stifling, restrictive, or frustrating, with ripple effects on operations and financial planning”. Some reported significant risks to supply chains and delays in meeting orders due to the lack of forex, she said.
She stressed that the delay in appointing a board at Exim Bank had worsened the problem.
“The delay in the appointment of a board at the Export-Import Bank of Trinidad and Tobago resulted in the suspension of the Foreign Exchange Facility, and this too had curtailed the availability of foreign exchange to our members. There was a general sentiment from our members that a lack of transparency in allocation and limited policy responsiveness has exacerbated business uncertainty,” she said.
Pierre-Chase also highlighted concerns over the credit card restrictions imposed by banks, including Republic Bank Ltd’s US$1,500 monthly cap, which was implemented on August 15.
“Many of our members in the SME sector have described the new limits as disruptive or highly significant. Their inability to access forex from the banks has driven them to utilise their credit cards to fund purchases of critical foreign inputs for their businesses, to settle the fees for subscriptions and meet some day-to-day US dollar commitments. The new credit card restrictions have, therefore, significantly impacted business operations, and in some cases may have an impact on the survivability of some of our members in the SME sector,” Pierre-Chase said.
To address these issues, the Chamber included a series of recommendations in its 2025/2026 budget submission to the Ministry of Finance.
“In our 2025/2026 Budget Recommendations to the Ministry of Finance, we highlighted that economists have diagnosed T&T with Dutch Disease, an overvalued exchange rate and high import penetration stemming from energy booms, which hinder non-energy industries,” she explained.
Among the Chamber’s proposals were:
Greater focus on the Orange Economy: “For T&T, with our internationally recognised cultural assets (Carnival, soca, calypso, steelpan, literature, and cuisine), the Orange Economy represents one of the greatest opportunities for diversification and forex generation. These are some of the reasons why the chamber established an Orange Economy Standing Committee.” She also noted that this sector is valued at over US$2.2 trillion and employs nearly 30 million people. For instance, South Korea’s “K-Wave” (K-pop, film, and digital content) is a major export earner; Colombia and Mexico have invested in creative hubs that have boosted GDP and youth employment.
Reducing the food import bill: “This unsustainable and high food import bill undermines national food and nutrition security, increases vulnerability to global supply shocks, and drains foreign exchange. There is an initiative by Caricom to reduce food imports by 25% by 2025, which has been extended to 2030, and we implored the Government to implement the institutional framework for the country to obtain the goal in the time frame set by Caricom.” Pierre-Chase noted this followed T&T recording its food bill at TT$7.3 billion in October 2024.
Transparent forex management: Adoption of a clear allocation policy accessible to all businesses; publication of monthly Central Bank reports on forex availability and distribution; prioritisation of productive and service sectors; improved SME access; and expansion of the Exim Bank facility to non-energy service industries.
Managed float system: “A managed float would reduce the black market buying and selling of foreign exchange, thereby providing more funds to the banking system,” she explained.
Pierre-Chase stressed that many service-based industries remain excluded from Exim Bank’s facility, including refrigeration and air-conditioning, facilities management, and ICT, despite their export potential. “We have expressed the view that the exclusion runs counter to the Government’s diversification objectives and limits the potential for these industries to contribute to export-led growth,” she said.
She argued that bold structural reforms are required and said, “In the main, we need to turn talk into action when it comes to economic diversification, with specific attention on tourism, ICT, agriculture, creative sector and other non-energy sectors. We need to urgently reduce import dependency (in particular, our food import bill) and boost exports. We need to strengthen the ease of doing business to attract foreign investment. We need to expand our Special Economic Zones and include nearshoring as a component.”
Dukharan: Structural
failings also to blame
While the Exim Bank issue has intensified the squeeze, economist Marla Dukharan argued that T&T’s forex crisis stems from deeper structural failings rather than short-term shocks.
She said while reduced energy revenue has contributed to the tightness, she pointed to the “thriving black market for forex” as a major driver of instability.
“In particular, the fact that there is a thriving black market for US dollars in T&T, where you can source US dollars for anywhere between TT$8-$10: US$1, while the Central Bank sells our foreign exchange reserves to licensed forex dealers at anywhere between 14% to 43% cheaper than the black market price, is possibly the biggest factor driving tightness in the forex market,” she said.
According to Dukharan, the Government has been fuelling this distortion since 2012, when it abandoned the auction mechanism for US dollars.
“Imagine subsidising something and then wondering why people want so much of it. That the Government of T&T, since 2012, has been subsidising US dollars—a highly sought-after and in-demand item as the world’s most widely used currency, accounting for close to 60% of the world’s currency reserves—while simultaneously feigning shock and confusion at the ‘shortage’ of US dollars (which they created), is supremely absurd.”
She added that she would usually consider such behaviour “rather psychotic”, except that she sees a “perfectly logical explanation of why the Government is subsidising the sale of US dollars and creating de facto (not legislated) forex controls which they can manipulate at will”.
“Just look at Venezuela—this is exactly what Chavez and then Maduro did. They have politicised the access to foreign exchange in the first place. But why subsidise it? Well, subsidising the sale of one of the world’s most sought-after and prized items only makes sense if you consider the fact that since 2011 (according to Central Bank data), our country has ‘spent’, to quote Dr Terrence Farrell, US$25 billion on…well, we don’t actually know what it was spent on,” she explained.
She noted that this “missing” US$25 billion, averaging about US$2 billion annually, appears under the errors and omissions item in the balance of payments.
“And if some (unauthorised) person(s) are somehow accessing our forex reserves and somehow ‘spending’ it on things that nobody is aware of, then the subsidy makes perfect sense. Why pay more for something if you can easily pay less? As I highlighted here more than a year ago, T&T is the world’s largest loser of forex, via the errors and omissions item. This translates into over US$17K per Trinbagonian going missing—the highest number globally.”
On whether reducing credit card limits could provide relief, Dukharan said it could stem the outflow, “but it is likely to be only as effective as standing in the hot sun and wearing a hat to try to keep cool”.
“You have to get out of the sun. Reducing the credit card limits does not solve the underlying problem of excess demand vs supply of US dollars which can most effectively be addressed in a combination of three ways; increase the price of the US dollar (the exchange rate) in a measured fashion to not cause (price) instability/inflation (which is exactly what the auction mechanism did, until the People’s Partnership and former governor Jwala Rambarran abandoned it for no reason); reduce the demand for and outflows of US dollars, which is likely to happen when the TT dollar is depreciated against the US dollars; and increase the inflows of US dollars via supporting export competitiveness, which a depreciated TT dollar vs US dollar achieves.”
She argued that until 2012, T&T had a system that worked “relatively well”.
“I can only hope that the new governor, Mr Larry Howai, who is a seasoned banker and understands the mechanism of the forex market very well, will do the right thing and reinstate the auction mechanism which (former finance minister) Mr Colm Imbert promised to do for years. Alas.”
Turning to Republic Bank Ltd’s recent move to reduce credit card limits, Dukharan questioned the bank’s ability to fund its overseas acquisitions.
“I also want to highlight, related to Republic Bank’s acquisition of Cayman National Bank—where did they access the forex to purchase this bank and also to acquire other overseas banks over the years, in Ghana, Suriname, etc? This recent purchase of the remainder of Cayman National took place weeks before their announcement of reduced credit card limits. Is this purely a coincidence? Recall that they are a publicly traded entity, but majority-owned by the Government of T&T.”
Dukharan urged greater scrutiny of how forex is being managed and disbursed, calling for a formal investigation.
“I would also encourage the board of the Central Bank, the Minister of Finance (Davendranath Tancoo), the President, to request a forensic audit of the Central Bank, our foreign exchange reserves, and the process around forex being bought by the Central Bank/acquired from the Government and sold by the Central Bank, to determine whether there is some possible misappropriation and/or unauthorised selling of US dollars, which could potentially explain the US$25 billion we have ‘spent’ (according to Farrell) as recorded in the errors and omissions item of the balance of payments—the highest per capita amount of forex ‘spent’ in the world,” she said.
