Tag: Central Bank of Trinidad and Tobago

The Interest Rate and Foreign Exchange Environment in Trinidad and Tobago

3 February 2015

The Repo Rate in Trinidad – a brief background history

The repo rate in the Republic of Trinidad and Tobago averaged 5.3% in the period from 2002 to 2014 reaching a high of 8.75% in September 2008 and a low of 2.75% in 2012.
Following two consecutive increases in the repo rate of 25 basis points in September and December 2014 the Central Bank yesterday increased the rate an additional 25 basis points from 3.25% to 3.5%.

Why has the repo rate increased for the last consecutive three quarters? Read more…

Interest rates and exchange rates – a macro-economics 101

28 January 2015

Interest rates and the hungry investor

Smart rational and hungry investors are always on the hunt for stronger returns on their investment funds. The return on fixed income securities is usually measured by the interest rate. Ceteris Paribus the larger the interest rate the more attractive the security.Hungry investors exist in all countries and in the modern world they will seek out desirable investments in every corner of the planet. In other words a bond (or indeed any marketable investment) issued in one country may attract foreign as well as domestic investors.

Who sets the interest rate? Read more…

Liquidity Problem

17 September 2014

A Different Type of Liquidity Problem for Institutions in Trinidad & Tobago

As at Tuesday, 16 September 2014

This commentary is the first in a series that engages Firstline Securities Limited’s institutional investors to consider Firstline for its Asset Management / Treasury Management needs. The series will focus on what is Firstline’s value proposition, developing an Investment Policy Statement, securities available in the local market, constructing a portfolio and active versus passive management.

Following the global financial crisis of 2007 – 2009 all corporate entities globally (inclusive of Trinidad & Tobago) were forced to review the riskiness of their balance sheets. In most cases the response was to consolidate around core business lines and deleverage. The actions of corporate entities along with expansionary fiscal and monetary policies utilised to combat economic decline have created a new problem for some corporate entities. Too much liquidity!!!

Over the period 2009 – 2013 commercial banks excess reserves held at the Central Bank of Trinidad & Tobago have increased approximately 225% from TT$2.0B to TT$6.5B. At its peak excess reserves stood at TT$8.27B in September 2013. The last measure of excess reserves as at June 2014 was TT$6.29B.

Read more…

In T&T: New $50 note by Aug 1

21 June 2012

Can you get used to someone asking; “Got change for a $50?”

The Central Bank has issued a new $50 note to coincide with Trinidad and Tobago’s 50th Independence anniversary celebrations.

The olive green note was unveiled yesterday at the Bank by Governor Ewart Williams and Finance Minister Winston Dookeran at a special ceremony at the Eric Williams Financial Centre, Port of Spain . Read more…