The Central Bank injected $ 1.012 billion into the foreign exchange market between January and October 2021, Finance Minister Colm Imbert said on Wednesday.
In addition, the government, through the Exim Bank, provided access to an additional $ 524 million, which “led to a total intervention of $ 1.536 billion in the foreign exchange market for the first ten months. of this year, ”he said.
Imbert was responding to a question from Mayaro MP Rushton Paray in the House of Representatives about steps being taken to address the currency shortage in time for the next peak trade periods.
Imbert said the government regularly monitors the forex market and takes appropriate action when needed.
In this context, three new counters dedicated to foreign currencies have been created by the Government in recent years.
As a first step, a window was opened at the Central Bank for state-owned enterprises to meet some of their foreign exchange demands in order to ensure that the supply of goods and services essential to the population was not interrupted.
This provides currencies to entities like WASA, T & TEC, TSTT, Paria Fuel Trading, etc.
In addition, two other special forex counters have been established at Exim Bank for the import of essential goods, such as staple foods and pharmaceuticals and one for import by manufacturers of export materials. raw materials and equipment, the minister said.
These three facilities have provided foreign exchange on a targeted and structured basis, and are outside and in addition to regular injections of foreign currency by the Central Bank into the commercial banking system.
Imbert said that it should be noted that in accordance with Articles 5 and 6 of the Foreign Exchange Control Law, the Central Bank has adopted the role of maintaining orderly conduct and stability of the domestic market.
To achieve this goal, the bank regularly sells foreign currency to authorized dealers in the market to meet excess demand by closing the net sales gap.
Over the period January to October 2021, the net sales spread was $ 843.1 million, down 11.9% from the previous period, the minister said.
Thus, Central Bank sales of US $ 1.012 billion to authorized dealers supported the market during the reporting period.
“This intervention allowed authorized dealers to meet demand as sales of foreign exchange by authorized dealers to the public increased 6.5% to $ 3,992.9 million during the period January to October compared to the same period of the previous year.
“In addition, the Central Bank maintains frequent dialogue with authorized dealers with a view to better understanding emerging developments in the foreign exchange market and improving the effectiveness of its intervention program,” said Imbert.
He said access to forex through the three US dollar facilities set up at Exim Bank, where state-owned enterprises, importers and exporters of essential goods can access forex, increased from $ 209 million. US dollars in 2017 to 575 million US dollars in 2020.
He said that between January and October 2021, access to these facilities amounted to $ 524 million, which led to a total intervention of $ 1.536 billion in the foreign exchange market for the first ten months of This year.
Asked why small and medium-sized businesses and the non-trading sector have difficulty obtaining forex from banks, Imbert said the government continues to monitor the market and make forex available on a regular basis.