Home' Trinidad and Tobago Guardian : December 2nd 2014 Contents A A
The Central Bank of T&T has once again
raised the repo rate by 25 basis points, bring-
ing it to 3.25 per cent yesterday, just months
after raising the repo rate by the same margin
Central Bank Governor Jwala Rambarran,
at a Monetary Policy Forum in Chaguanas
yesterday, said: "You ve seen the monetary
policy stance changing which means once we
start to improve the appeal of TT dollar assets,
there will be a greater level of attractiveness
of those assets, and that means funds could
start to stay home rather than go outside of
T&T to search for higher yields."
Rambarran also cut the country s projected
gross domestic product (GDP) growth rate for
2014 to 0.5 per cent from over 2 per cent "on
dismal energy sector performance," saying gas
producers BP and BG continued to have dis-
ruptions in supply mainly due to maintenance
and planned shutdowns.
Taking reporters questions after his pres-
entation, when asked about only one bank
taking the cue from the Central Bank to raise
its interest rates, Rambaran said: "We expect
to see an adjustment from the commercial
banks in terms of their interest rate structure.
What we have to bear in mind is that the repo
rate is a signalling rate, so it tells you what
we would like to see.
"Second, we have an excess liquidity over-
hang, so a 25 basis points increase in the repo
rate is not going to fundamentally affect the
assets and liabilities structure of the bank."
Asked by when he estimated to see more
banks raise interest rates, Rambarran said that
depends on each bank and what their balance
sheet can handle. He said he does not antic-
ipate the banks will disregard the signal.
"Interest rates are going to move from his-
torical lows and gradually increase," he said.
Inflation climbed to a two-year high at 9
per cent in October, Rambarran confirmed:
"To guard against further inflationary pressures
going down the road."
He said the Central Bank was changing the
repo rate, the effect of which is usually not
seen before nine months.
Asked if T&T could see double-digit infla-
tion going forward, he said it is "quite possible
that food prices will go up," for the upcoming
Christmas season, and double-digit inflation
could occur. Rambarran said he expects the
Ministry of Finance and the Economy "to cut
expenditure to match shortfalls in energy rev-
enue" as a prudent measure in the face of
falling oil prices.
"That would help with liquidity in the sys-
tem," he said.
Fiscal spending accounts for 37 per cent of
GDP according to RBC Caribbean research
released November 26.
Asked why the US$1.0174 billion proceeds
from the sale of CL Financial s stake in MHTL
are being counted in foreign reserves, bolstering
the latter to climb to over US$11 billion, Ram-
barran said: "The bank couldn t hold that
amount of US dollars because it would have
actually hit all its exposure limits."
He said the aim was "to prevent the bank
from breaching all exposure limits, and to ster-
ilise the impact of that amount of USD money
coming into the system."
After faulting debt maturities for much of
the $8 billion liquidity now in the country s
financial system, Rambarran said government
will be returning to market with a $440 million
bond issue, a continuation of "the August last
year issue." The government s August 2013 $1
billion bond issue was under-subscribed.
Asked why the deficit is being financed
with bonds again if upon maturity they add
liquidity to the system he said: "When you
issue the bond, you actually take liquidity out
the system, so it helps. When the bond matures
then liquidity is put into the system, and we
have a programme of open market intervention.
We know when the bonds will mature, and
therefore we programme to neutralise that
particular liquidity impact by issuing open
T&T raises repo rate again
C B 2,
• Twitter: @GuardianTT • Web: guardian.co.tt
Scotiabank has been
named the Bank of the Year
in T&T by The Banker mag-
azine, a Financial Times
publication. This is second
consecutive year the bank
has been recognised by the
publication, having also
won the title in 2013.
"We are proud of this
award because it is a reflec-
tion of the hard work of our
employees and their focus
on providing sound finan-
cial advice and good service
to our customers," said Anya
M Schnoor, managing di-
rector, Scotiabank T&T
Limited. "Scotiabank has
had a presence in Trinidad
and Tobago for 60 years now
and we re proud to be
known for our customer
service and for delivering
superior results for our
this award joins the Bank of
the Year 2014 title we re-
ceived last month from Lat-
inFinance, so to win two
Bank of the Year titles in our
60th anniversary year, is
quite an achievement."
Scotiabank was also
named Bank of the Year
2014 by The Banker in An-
tigua, Bahamas, Barbados,
Belize, Grenada, Guyana and
The Banker selects win-
ners based on their ability to
deliver shareholder returns
and gain strategic advan-
n y n
C n B n '
C n ,
n n B n
Links Archive December 1st 2014 December 3rd 2014 Navigation Previous Page Next Page