Home' Trinidad and Tobago Guardian : October 1st 2015 Contents BG4 COVER STORY
BUSINESS GUARDIAN www.guardian.co.tt OCTOBER 1 • 2015
If manufacturers cannot easily access
foreign currency to do their business,
then this will only fuel speculation
and hoarding, says Ramesh Ramdeen,
the chief executive officer of the T&T
Manufacturers Association (TTMA).
"If that predictable environment is not there,
and the Governor of the Central Bank puts
an extra $2 billion in the system, manufacturers
are going to hoard. So when the money is
there, even if they do not need it, they will
soak it up because they want their operations
to continue. They cannot run a factory with
300 people and do not have the money," he
said at a workshop at Hotel Normandie last
Ramdeen referred to past remarks by the
Central Bank Governor Jwala Rambarran who
suggested, in a speech in December last year
that some people were using foreign exchange
to conduct business with companies with ter-
rorist links. (See box)
Ramdeen said he disagrees with that as it
is simply a case of lack of confidence in the
"Even if a manufacturer has access to $4
million and does not need it he will take it if
he has the opportunity. All this leads to hoard-
ing and speculation."
He said these problems affect manufacturers
as they want to operate in an environment
that is predictable, that is transparent and
when they go to their suppliers they have the
money to pay them.
He also said the instruments are not there
in T&T to give people incentive to save in TT
"You put your money in a TT-dollar account
and you get zero per cent. So, if there are
instruments in the international arena where
you convert the US dollars and you get four
per cent or five per cent you will convert to
He also spoke about the exchange rate sys-
"Some people may ask why the government
does not print more TT dollars?
"People do not understand how the managed
float or floating system operates in T&T. All
things being equal, if you have two TT dollars
and one US dollar in the system, the exchange
rate will be two to one.
"What the Government does is it keeps it
within this managed framework of six point
something dollars to one US dollar. So if there
is too much foreign exchange in the system,
they take it out and put it in the Heritage and
Stabilisation Fund (HSF) or in the reserves to
keep the balance. So if the Government prints
willy nilly without earning foreign exchange,
it depreciates the dollar," he said.
Ramdeen spoke last Friday at a business
performance optimisation workshop hosted
by the ICT company Ixanos at the Normandie
Hotel, St Ann s.
Hard currency and regional trade
Ramdeen said T&T needs to earn foreign
exchange both at the macro level, which is
the country level, and also at the micro level,
which relates to companies.
"We need to earn foreign exchange to buy
goods and services. There is no way to purchase
goods and services on the international markets
if you do not have foreign exchange. T&T s
currency is not recognised as a hard currency
internationally. In fact, throughout the region
only Guyana might accept some T&T currency,
when we negotiate with them to trade in goods,
they want part payment in hard currency and
part payment in T&T currency," he said.
He said it is time that the countries of the
region begin to trade in the local currencies
of the region.
"That will facilitate a great amount of goods.
An example is Jamaica which consumes our
goods and services but they do not want T&T s
currency. If they did, it would allow T&T to
save on its foreign currency. In Jamaica there
is a very important reason why they need for-
eign exchange and that is to pay their external
debt. They cannot pay their external debt in
a regional currency and they have to pay that
in hard currency. All the International Monetary
Fund (IMF) loans they took in the past, Jamaica
must now pay for these. The only way for this
to be done is in hard currency," he said.
Ramdeen said the Caribbean region has the
most "uncommon common market."
"If we had a common market that is sup-
posed to be working the way it is supposed
to be working, we are supposed to have a
single currency. If we include Haiti in the
common market, it means we have 15 coun-
tries. We have 15 countries with nine different
currencies which include Haiti, the OECS
countries, the Bahamas," he said.
He said at the company level, manufacturers
TTMA's Ramesh Ramdeen:
T&T needs to earn more forex
Ramesh Ramdeen, left, T&T Manufacturing Association's CEO, congratulates St Clair King, second from right, chairman, Ixanos Ltd. Looking on is Stephen King, CEO, Ixanos Ltd, second left, and Dr
Rikhi Permanand, executive director, Economic Development Board/Council for Competitiveness and Innovation, Ministry of Planning and Sustainable Development. This was during a Business
Performance Optimisation workshop, at the Normandie Hotel, St Ann's. PHOTO: SHIRLEY BAHADUR
Continued on Page 5
The TTMA wants the
Government to create a
facility---maybe using the
Exim Bank---that will
allow manufacturers to
pay their suppliers.
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