TRINIDAD-Central bank governor says institution well poised to deal with “another challenging year”

PORT OF SPAIN, Trinidad, CMC – The Governor of the Central Bank of Trinidad and Tobago (CBTT), Dr. Alvin Hilaire, says the financial institution remains well poised to confront what promises to be another “challenging year ahead” for the oil-rich twin island Republic.

“The global backdrop is expected to center around the likelihood of weak growth in many regions induced by policy responses to high inflation. Underlying risks associated with cybersecurity, climate change, and an intensification of international competition also remain part of the equation,” Hilaire said as the CBTT released its Report for the year ended September 30, 2022.

Hilaire, chairman of the CBTT board of governors, said that he remains confident that the bank and its employees, with its demonstrated track record of performance, will once again rise to the challenge.

In the Report handed over to Finance Minister Colm Imbert, the CBTT said that the financial year 2021/22 saw a steady revival of the Trinidad and Tobago economy as business activity reopened following pandemic-induced lockdowns.

“At the same time, the global economic situation was complicated by geopolitical tensions, high inflation that led to widespread monetary tightening, and volatility in financial markets.”

Hilaire said that the period also marked the first year of the CBTT’s 2021/22-2025/26 Strategic Plan, a successor to an earlier five-year plan, noting that good progress was made on all three of the plan’s pillars, monetary policy, financial stability, and internal operations during the financial year and that an ambitious set of objectives has been established for the year ahead.

Hilaire said globally, there has been a rapid increase in food and fuel prices, driven by a mixture of supply shocks associated with the pandemic and the war between Russia and Ukraine.

“Many central banks have tightened monetary policy, resulting in higher interest rates and a slowdown in growth. This has led to volatility in equity markets, depreciation pressures, and higher external borrowing costs in many emerging and developing economies.

“There are good signs of a measured broad-based recovery domestically. A revival of business credit has supported manufacturing, construction, and distribution activities,” Hilaire said, noting that the energy sector and Government revenues benefitted from the rise in global energy prices.

“The openness of the domestic economy also meant that the escalation in international commodity prices was passed on locally,” he said, noting that domestic inflation reached over six percent in August and September 2022.

He said on the financial stability front. Advances were made in strengthening intraregional supervisory collaboration and advancing the Fintech agenda.

Hilaire said that a Regional Financial Stability Report was finalized during the year, while insurance institutions received guidance in conforming to International Financial Reporting Standards (IFRS) standards.

In addition, the new Payments and Market Infrastructure Department made significant strides in moving forward the regulatory apparatus for FinTech solutions,” he said, noting that one aspect of improving the operations of the foreign exchange market, the Foreign Exchange Liquidity Guarantee Facility was extended into 2023.