Tag: Trinidad and Tobago economy 2015

A time to get a little Moody?

6 May 2015

Moody’s downgrade of Trinidad and Tobago

On the 30th April 2015 Moody’s Investor Service downgraded Trinidad and Tobago’s government bond rating from Baa1 to Baa2 and changed the overall country outlook from stable to negative.
Moody’s cited three factors for the downgrade: Read more…

The tale of the weeping businessman and a more interventionist Central Bank 

27 February 2015

The cries of the business community

Over the last six months the business community has been vociferous in it cry that the supply of foreign exchange in Trinidad and Tobago is inadequate and that the lack of supply is crippling their trading activities.
This may be an over exaggeration but there is no doubt that it is not as easy to source United States dollars as it used to be. If you have been following the previous four blog entries in this macro-economic series you will have some idea as to why this is the case.

Who supplies the foreign exchange in Trinidad and Tobago?

Under normal trading conditions the Central Bank typically supplies 25% of the available foreign exchange in Trinidad and Tobago with the remaining 75% being supplied by the commercial banking system.
Read more…

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…