Home' Trinidad and Tobago Guardian : August 20th 2014 Contents A23
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The Central Bank yester-
day sold US$50 million to the
This sale was timed to
provide further support to
the foreign exchange market
based on anticipated lower
volumes of conversions by
energy sector companies
during the second half of
August 2014, the bank said
in a statement.
The bank said the total
amount of United States
funds it has sold to autho-
rised dealers for the year so
far is US$1,040 million.
For the first six months of
2014, the Central Bank sold
$US690 million to the finan-
cial system, or equivalent to
one-fifth of the total supply
of foreign exchange to the
market. For the year to date,
the bank said it has provided
almost one-quarter of the
total foreign exchange supply
to the market.
T&T s net official reserves
currently stand at US$10,134
million, representing in ex-
cess of 12 months of import
The Central Bank said it
continues to closely monitor
the domestic foreign ex-
change market and will act
proactively to ensure market
order and stability.
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The Government of T&T is expected to
close the country s 2013/2014 fiscal year
with a $6.4 billion deficit, the Inter-American
Development Bank (IDB) said in its second
quarter Caribbean bulletin released August
"A fall in transfers and subsidies and higher
than expected revenue inflows led to a budget
surplus in the first half of fiscal year 2013/14.
"The Government is expected to generate
$55 billion in revenues and expend $61.3 billion,
resulting in a deficit of $6.4 billion or 3.6 per
cent of gross domestic product (GDP), one
per cent less than in fiscal year 2012/13," IDB
economists said in the bulletin.
Despite a projected budget deficit in the
first six months of the fiscal year (October to
March 2014), a surplus was recorded, the IDB
said. Higher than expected budgeted revenues
came from the inflow of receipts from the
First Citizens Bank Ltd initial public offering
(IPO) and some extraordinary dividends from
a state enterprise, the bulletin said.
In addition, a falloff in transfers and sub-
sidies contributed to expenditures being lower
than anticipated for the first half of the fiscal
year, the IDB said.
"This trend may not persist as capital
expenditure (which is budgeted at $8 billion,
the largest on record) is expected to rise if the
budget target is to be met," the bulletin said.
At 2.5 per cent, the IDB s growth projection
in the bulletin was inline with that of other
institutions, as was the 2.0 per cent growth
it said the country had in 2013. The IDB said
the "growth momentum" picked up in the
energy sector in 2014 "should carry over into
"In the energy sector, exploration activity
is expected to pick up as drilling in shallow
water blocks and new development wells are
ongoing in addition to the awarding of further
onshore bids, while in the non-energy sector,
several large public and private sector projects
are being implemented."
On commercial bank credit to the private
sector, the IDB said that consistent with
improvements in the non-energy sector, lend-
ing improved in the first quarter of 2014.
Twelve-month private sector credit expand-
ed by 6.0 per cent in March 2014, up from
an increase of 2.5 per cent the previous 12
"One notable aspect of the expansion in
private sector credit is that of business loans,
which were on the decline for the past 14
months, but have increased by 3.5 per cent
in March 2014.
"Other components of private sector credit,
such as consumer loans (6.0 per cent) and
real estate mortgages (11.8 per cent), also con-
tinued growing robustly in the 12 months to
February and March this year," the bulletin
Turning to the local stock market, the IDB
said it has shown "improvements despite a
contraction in the banking sector, but more
has to be done to encourage small companies
to list on the stock exchange."
The local stock market showed a strong
performance in 2013, but that did not carry
over into the in first four months of 2014, the
The sharpest contraction was recorded in
the banking sector as share prices of both
First Citizens Bank Ltd and First Caribbean
International Bank Ltd fell on a year-to-date
The bulletin said: "While the Government
introduced the small and medium enterprise
(SME) market (on the stock exchange) in 2012
to provide small companies with an avenue
to further raise capital, it has not been suc-
cessful thus far.
"This is partly due to regulations on the
ownership of shares after listing, relatively
low interest rates, and excess liquidity in com-
Central Bank releases US$50m into market
IDB expects $6.4b deficit
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