Finance Minister Davendranath Tancoo says there will be no devaluation of the Trinidad and Tobago Dollar.
The Finance Minister tells TV6 News that the Government will target illegal transactions engaged in by a few which accounts for a substantial leakage of foreign exchange from the system.
00:00Finance Minister Devendranath Tanku tells TV6 News in the short term, the government has limited foreign exchange being earned by existing market operators.
00:10In response to our question on the foreign exchange issue in Trinidad and Tobago, Finance Minister Tanku said the government has to maximize the use of existing foreign exchange while stimulating new sources of foreign exchange generation.
00:23Minister Tanku further said that, importantly and simultaneously, the government must target the illegal transactions engaged by the few, which accounts for substantial leakage of foreign exchange from the system.
00:37The Finance Minister said he is advised that the thriving black market for U.S. currency feeds into a wider cabal engaged in major crimes in Trinidad and Tobago, including illegal gambling and money laundering.
00:51As he claimed, the former PNM-led government turned a blind eye to this practice.
00:57Minister Tanku told TV6 News Prime Minister Kamla Passat-Besessa has mandated her ministers to take every requisite action to confront crime at every level, including white-collar crime, that they have done so and will continue to do so, despite what the Finance Minister called the attempted distractions of the PNM.
01:18Minister Tanku then said, quote, cabal after cabal will fall, end quote.
01:23TV6 News has sent the Finance Minister a question on Monday about businessman Emilio Elias' appeal to Prime Minister Kamla Passat-Besessa to raise the exchange rate for the U.S. dollar from TT$6.80 to TT$9, as reported by the Sunday Express.
01:41On Sunday, former Minister of Finance, now opposition MP, Colm Imbert, said on the social media platform, ex-quote,
01:50it's easy for rich people with endless U.S. dollars in offshore bank accounts to push for devaluation.
01:56They have no regard for poor people like the 10,000 unemployed CPEP workers who will be the only ones to suffer if the dollar goes to 10 to 1.
02:05Even bread will be unaffordable, end quote.
02:08Finance Minister Tanku made no mention of MP Imbert's comment.
02:13However, Minister Tanku said, quote,
02:15it is my view that devaluation cannot work to stimulate the TT economy in its current structure.
02:21The standard argument is that a weaker currency makes exports cheaper and imports more expensive, thereby improving the trade balance.
02:30However, this only holds if our exports are sufficiently price elastic, end quote.
02:35The finance minister said in the case of Trinidad and Tobago, quote,
02:39non-energy exports remain relatively small and are themselves import-intensive.
02:44A devaluation, therefore, would primarily raise the cost of imported inputs, driving up the cost structure of non-energy exports.
02:52This means they would not become more competitive internationally.
02:55This has the potential to decimate a large number of small and medium-sized businesses at a time when we need more productive activity from them.
03:04At the same time, our citizens would face higher import costs, which would feed directly into domestic inflation, end quote.
03:12The finance minister said that some big businesses which have used preferential access to foreign exchange over the years to spread their business abroad
03:21and with familial connections operating in the SME sector will easily be able to take advantage of the financial benefit of foreign exchange stored abroad, which will now be worth more.
03:33The finance minister told TV6 News, quote,
03:36Ultimately, devaluation would do little more than trigger inflation in the local economy.
03:42Our approach is to build resilience, improving productive efficiency, stimulating domestic activity to substitute imports, and expanding export capacity, end quote.
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