NH International Chairman Calls for Exchange Rate Increase
Emile Elias, Executive Chairman of NH International (CARIBBEAN) Ltd, has urged Prime Minister Kamla Persad-Bissessar to raise the US dollar exchange rate from the current $6.80 to $9. The central bank states that the exchange rate is presently at $6.79 per dollar.
In a recent statement, Elias criticized former finance minister Colm Imbert, labeling him as the worst in the nation’s history. He cited Imbert’s “reckless” choices regarding foreign exchange and the broader economy.
Elias emphasized that the nation’s financial policies should be managed by central bank governors to address fiscal issues, including budgets and expenditures. He expressed that acting decisively could establish a legacy for the Prime Minister as someone who restored stability to exchange rates, eliminated black markets, and rebuilt reserves. “If you act now,” he stated, “you can enhance the credibility of Trinidad and Tobago.”
He suggested that demand for foreign currency would stabilize once the black market dissipates, leading to increased exports and more favorable conditions for citizens and businesses accessing the US dollar through banks.
While criticizing Imbert, Elias also pointed out that he was not the only one responsible, noting that past decisions made by other leaders contributed to the challenges faced today. He implored the Prime Minister to take bold steps to save the country from economic decline.
Addressing Imbert’s management of the foreign exchange crisis, Elias reiterated, “He will be remembered for the worst financial oversight in Trinidad and Tobago.” He argued that Imbert’s controversial policies were backed by former Prime Minister Keith Rowley, who kept him in office despite the turmoil.
Elias pointed to a significant decline in national reserves, stating that the USD 11.45 billion in reserves from 2014 has plummeted to troubling lows. Analysts have suggested that, when accounting for foreign debt, the net reserves are nearly zero.
While Elias acknowledged that borrowing wasn’t intended for development, he criticized its use to maintain a façade of forex availability. He remarked that the country now suffers from a shortage of foreign exchange, leading to stalled projects anticipating US dollars for necessary imports. Notably, he mentioned that the black market for US dollars has surged, with rates reaching $9 outside the banking system.
Elias warned of dire consequences if the International Monetary Fund (IMF) intervenes, which could result in austerity measures that would impact government spending and increase unemployment. He cautioned that the current approach is unsustainable and that failing to act could lead to severe repercussions for the population.
Reflecting on past leadership, he recalled how in 1993, former Prime Minister Patrick Manning and Finance Minister Wendell Mottley altered the exchange rate, fostering economic stability and attracting investments. He insinuated that the current situation calls for similar bold decisions. Elias solicited the Prime Minister to choose between immediate corrective action or waiting for external intervention.
He proposed a series of measures designed to alleviate poverty and stimulate the economy, including a targeted food stamp program, revised electricity charges, and an incremental increase in the minimum wage.
Elias underscored that mere adjustments to foreign exchange policies are inadequate. The situation necessitates a fundamental reevaluation of the value of the TT dollar to avoid a prolonged economic decline.
