PORT OF SPAIN, Trinidad, CMC—The Central Bank of Trinidad and Tobago (CBTT) says foreign exchange market conditions remained tight and have continued to influence the outturn for foreign currency credit and deposits this year.
In its November Monetary Policy Report, the CBTT said the growth rate of foreign currency credit, though still robust, decelerated slightly, recording a year-on-year increase of 23.8 percent in September 2024, down from 25.4 percent in April.
It said commercial bank foreign currency lending picked up pace (24.9 percent), but the growth in non-bank foreign currency lending slowed considerably (10.3 percent).
Regarding foreign currency credit to businesses, in September 2024, an increase of 30.7 percent was observed, down from 33.4 percent in April 2024. The CBTT said that based on prudential indicators it is monitoring, the growth observed in foreign currency lending currently does not suggest a buildup in financial risks.
It said that foreign currency deposit growth accelerated over the period after recovering in April (1.5 percent).
In September 2024, foreign currency deposits expanded by 7.5 percent (year-on-year). The growth in business foreign currency deposits gradually accelerated over the period, reaching 5.6 percent in September 2024 (up from 3.5 percent in April).
Consumer foreign currency deposits continued to decline but at a slower pace—compared to a 2.5 percent contraction in April 2024, they fell by 1.8 percent in September 2024.
The CBTT said the growth in foreign currency deposits held by public sector entities and other financial institutions picked up pace, reaching 19.6 percent in September 2024 (up from 2.7 percent in April).
However, it was said that foreign exchange market conditions remained tight thus far this year. “Purchases of foreign exchange by authorized dealers from the public amounted to US$3,725.5 million over January to October 2024, a decrease of 0.7 percent relative to the same period a year earlier.
“The marginal decrease in purchases followed a 0.3 percent rise in conversions by energy companies relative to the same period in 2023. For January to October 2024, purchases from the energy sector accounted for 72.7 percent of total foreign currency purchases over US$20,000 in value,” the CBTT said.
It said sales of foreign exchange by authorized dealers to the public reached US$4,927.4 million from January to October 2024, a decrease of 5.7 percent relative to the same period a year prior.
“Based on reported data for transactions over US$20,000, credit cards (43.7 percent), energy companies (17.1 percent), retail and distribution (15.8 percent), and automobile companies (5.3 percent) made up the bulk of foreign exchange sales by authorized dealers to the public (Chart 3.5). The net sales gap reached US$1,201.8 million during the period. The Central Bank sold US$1,075.0 million to authorized dealers to support the market,” the CBTT added.
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