KINGSTOWN, St. Vincent and the Grenadines, October 5, 2018 (CMC) – The government of St. Vincent and the Grenadines has rescinded its policy of requiring businesses to clear, with the Ministry of Finance, payments in US dollars, to firms in Trinidad and Tobago.
Minister of Finance, Camillo Gonsalves, announced, on Tuesday, the end of the policy, which he implemented in February, to press Trinidad and Tobago to address a currency challenge, affecting Vincentian traders.
“And, sometimes that approval was denied, and it created some challenges in the business community, because the fact of the matter is, to be completely honest, there are businesses in Trinidad and Tobago that don’t want to trade in TT dollars, because of the exchange rate and various other issues, that I think most of us know,” Gonsalves revealed.
He said the policy was creating some inconvenience, but that his government had repeated meetings with the Chamber of Industry and Commerce and individual businesses, asking them to “hold strain .… because this action was getting the attention of the Central Bank of Trinidad and Tobago”.
He said that the Eastern Caribbean Central Bank had a meeting on July 27 in Grenada and they released a communiqué.
“And hidden in the communiqué was this sentence: ‘Council noted the recent dialogue between the Eastern Caribbean Central Bank and the Central Bank of Trinidad and Tobago, exploring various options to address issues, related to the difficulties with payment settlement for traders selling agricultural produce in Trinidad and Tobago’,” the Finance Minister noted.
“What this means is that we got their attention, they engaged the Eastern Caribbean Central Bank and now the Central Bank of Trinidad and Tobago and the Eastern Caribbean Central Bank, because of this action, have reached a tentative deal on how we are going to settle this matter, without placing the burdens of currency controls on business, here, in St. Vincent and the Grenadines,” he added.
The minister said every “i” is not dotted and every “t” is not crossed.
“But having spoken to the governor of the [Eastern Caribbean] Central Bank, Timothy Antoine, and having regard to how much the businesses in St. Vincent and the Grenadines have held strain in this inconvenience, I have signed the appropriate document to rescind the exchange control act conditions on trading with Trinidad and Tobago.”
The Finance Minster thanked all of the businesses in St. Vincent and the Grenadines “for their patriotism”, saying that, in some instances, it cost them 7 percent more to issue their bill in TT dollars.
“… and they could have passed those costs on to Vincentian consumers. And because of their cooperation, they did not; they ate that price difference, that currency exchange difference”.
“It was a heroic act, by many of the businesses, here, in St. Vincent and the Grenadines,” he said and thanked the affected firms, singling them out “for the very strong work that they did in that regard.
“I want to thank them and all other businesses for their patriotism in that regard, and I want to say to the traders and to the traffickers, I want to say we anticipate a good resolution of this matter, in a matter of days. And when it is all completed, I will explain the nature of that resolution to the public,” Gonsalves promised.
Asked how he would respond to a comment that he had acted too early in rescinding the policy, in light of the fact that a resolution has not been reached, Gonsalves said: “In my conversations with the Eastern Caribbean Central Bank, Governor Antoine has assured me that the resolution is imminent.”
He further stated that the previous system — where the Bank of St. Vincent and the Grenadines was buying a certain amount of TT dollars and essentially cashing it out for the vendors — has sufficient cushion “to take us through the period of transition”.
He said that as the month was ending and his ministry knew that a lot of businesses would be making purchases, they wanted to relieve them of that particular stress “instead of doing it two weeks later, when they have already made the bulk of their purchases for the upcoming month”.
“So, it’s a judgment call but, based on the assurances that we received from the Central Bank, we thought it would be safe to make the decision at this time, and it certainly worked, in as much as it got the attention of the Trinidad and Tobago Central Bank and the Eastern Caribbean Central Bank and we wanted to end it, as quickly as possible, and we think that this is a judicious time to do it,” Gonsalves said.