Trinidad and Tobago’s foreign exchange (forex) supply has been significantly impacted by the downturn in the energy sector said former energy minister Kevin Ramnarine.
“We have less forex because of the downturn in the energy sector marked by a 35% reduction in both oil and natural gas production for 2015 v 2024,” he said in a WhatsApp exchange with the Express yesterday.
He added that liquid natural gas cargo sold has also fallen 50% if compared to 2014 to 2024.
“So that there is the nub of the problem. On the issue of banking and seeking some solutions, foreign energy companies with operations in T&T historically bank with international banks with operations in T&T,” Ramnarine added.
He said seeing this, the banks would get a disproportionate amount of the forex to T&T dollar conversions when these companies sell forex.
“This places the local banks at a disadvantage. The allocation policy of the Central Bank of T&T needs to consider this when they look at allocation policy. The other issue is energy companies paying taxes in T&T dollars. Some taxes are paid in US dollars and some in T&T dollars. VAT is paid in T&T dollars. That should be something that should be examined,” said Ramnarine.
He continued: “Former minister of finance Colm Imbert spoke about this in October 2024. I am not sure if anything has been done since then. The point is however that they would have to sell US to the commercial banks to get the T&T to pay VAT so it may be argued that it doesn’t lift the overall level of the forex pool but it could help in terms of a more equitable distribution to the commercial banks.”
