BASSETERRE, St. Kitts - PRIME MINISTER Dr. the Hon. Timothy Harris has informed that the Government and the Ministry of Finance is keeping a close watch on what is happening in Barbados and Trinidad & Tobago with regards to their shortage of the United States currency.
In recent weeks, business owners from the two CARICOM member states have been ‘gobbling-up’ the foreign currency from their sister state Guyana, prompting the Central Bank in that South American country to put a freeze on the purchase and sale of those two islands’ currencies.
During a press conference earlier this month (December), Governor of the Central Bank in Guyana, Dr. Gobind Ganga announced that they would temporarily stop the sale of the currencies.
He explained that based on information received, persons have been travelling from both Barbados and Trinidad and Tobago to purchase US dollars.
“We have temporarily stopped buying Trinidad and Tobago as well as Barbadian currency from cambios. However, individuals can still come to the Central Bank with legitimate transactions for these currencies.”
When word broke of the shortage of American currency in Guyana, commercial banks were making request to fill any gap there was, but Ganga and the Minister of Finance, Winston Jordan, gave assurances that that was not the case.
PM Harris, who is also the Minister of Finance, told SKNVibes that there is no shortage of such foreign currency in St. Kitts and Nevis and by the Union, adding that during his Budget Address he intimated that they have enough resources to cover imports into the country for the next eight months.
“I think the Currency Union is very strong and continues to be,” he said. “The currency strength, in fact, comes in part from the currency being backed apply by the US currency reserves. And so, we are in a very strong position in terms of our ability to access US currency, and in terms of our stock of the currency.”
While reiterating that the Federation is in a good position, Dr. Harris reminded that both Barbados and Trinidad and Tobago’s were going through a prolonged period of austerity.
That, he noted, would have had a major impact on their foreign currency reserve.
Dr. Harris declared that unlike some of the other islands, St. Kitts and Nevis does not have its own Central Bank that would make or give an individual decision, but the Eastern Caribbean Central Bank (ECCB) has competent personnel who would be monitoring that situation in all member states.
“We have no choice but to keep an eye on that. It is a matter that I am very sure that the Governor of the Central Bank and their professional team would be monitoring. We have the technical resources that would provide the advice to the Monetary Council which is made up of Finance Ministers of each country.”
To this end, he pointed out that like any other part of the region and the world, there is the possibility of “contagion”, And as such, the technical officers, the Ministry of Finance and the Central Bank would be wise to monitor “and be on guard to ensure that our Currency Union is not exposed; but most of all, it is not weaken as a result of any transaction or development that is taking place”.
