PORT OF SPAIN, Trinidad and Tobago, March 20, 2020 (CMC) – Trinidad and Tobago announced, on Wednesday, a series of measures that it hopes will help reduce the anticipated economic impact of the coronavirus on the oil-rich, twin island republic.
Prime Minister, Dr. Keith Rowley, told a news conference that the policies are conditioned on a two-month period, in the first instance, and hoped other forecasts, by experts, of the coronavirus being around for at least 18 months, “is not what we are dealing with”.
He told reporters, at the end of a special Cabinet meeting, “We are aiming to have a system, where there is high liquidity and low interest rates, immediately, and the conversation between the Governor of the Central Bank and the Minister of Finance, has resulted in a reduction in the reserve requirement at the Central Bank, from 17 to 14 percent, and a reduction in the Repo rate…from five percent to 3.5 percent.
“What that has done is, to put TT$2.6 billion, from the Central Bank, in the community. So all persons doing business with the …the commercial banks, TT$2.6 billion is available to them, so that these businesses will not be in danger of running out of cash,” the Prime Minister disclosed.
Rowley said that the commercial banks will experience a reduction in prime rate, and they will “pass that down”.
He explained that his administration was also moving to assist persons with financial commitments and likely to be affected “by what is happening in the economy”, and as a result, “some people will not be able to meet those commitments, because of their inability to pay”.
Prime Minister Rowley said the authorities, in their deliberations, have been able to get the commercial banks to agree to a moratoria, for one month, in the first instance, so that mortgages and instalments, loans could be deferred, “not forgiven, but deferred during this period of emergency”.
Finance Minister, Colm Imbert, later told reporters that the banks will offer all their customers the opportunity to defer payments, for one month, under the “skip a payment” program.
“As we see how this pandemic evolves, it will be on a rolling monthly basis, but we are starting with one month, and all penalties on non-payment of instalments, will be waived. So that when you skip the payment, you don’t suffer because of it,” the Finance Minister stated.
Imbert said that the banks have also agreed to reduce interest rates by 10 percentage points on credit cards.
He said regarding foreign exchange availability, the current system seems to be functioning well, where manufacturers are provided with foreign exchange to boost exports.
“We are going to increase the allocation and look at the limits in that system, because there is a threshold, at this point in time, to help mainly small manufacturers, and we will see what we can do to assist medium-sized manufacturers and put more money in the system.”
He said the intention is also to provide “foreign exchange for essential items, such as pharmaceuticals, basic foods…because that is critically needed at this point in time”.
Both Imbert and Prime Minister Rowley emphasised that the measures were also aimed at ensuring people are not placed on the breadline, as the country deals with the fall-out from the COVID-19.
“This is all about job preservation in this time of difficulty,” Imbert said, adding that the main private sector bodies have agreed to encourage their members to maintain the status quo, “and to keep all employees in jobs for the next four weeks”.
“They can’t force them, but they said they will use whatever persuasive ability they have, to get all members, of the Chamber of Commerce and the Trinidad and Tobago Manufacturing Association, to keep their members in jobs.
“But, of course, there must be a quid pro quo. The government owes all of these people a lot of money. We owe them VAT refunds, income tax refunds and overdue payables for janitorial services, construction works and so on. So what the government is doing, is accelerating the payment of arrears and outstanding payables to the business community,” Imbert said.
“We are going to give them a substantial proportion of the money that is owed to them…and this will allow them to keep their employees in jobs,” the Finance Minister said.
Imbert also announced a scheme for Credit Unions, through which the government will institute a Liquidity Support Loan Program, to benefit credit union members, who are “likely to be worst affected by this problem we have, at this point in time.
“The objective of the Liquidity Support Program is to provide loan facilities to individuals and small businesses, who, by and large, make up the membership of credit unions. So, we are going to set a regime in place, in collaboration with the credit unions,” Imbert said, in addition to the government already exploring the possibility of reducing the interest rates on loans, provided by these institutions.
During the news conference, Rowley also warned bar owners, who continue to have their establishments open, allowing for the congregation of persons, through which the COVID-19 could be easily spread.
He said he had asked the Office of the Attorney General to examine “whether, posing of a public health threat also poses a threat to the licences for those bars, and we are exploring that now, and we will not hesitate to take action, where action is available”.
Rowley said he was also disappointed that people were gathering at rivers, despite the call for them not to do so.
“I have asked the relevant local governments to restrict access to the river, and we are asking people to do what is sensible, not only for your own behalf, but for those to whom you pose a threat,” Rowley said.
Health authorities, here, said that, as of Wednesday, Trinidad and Tobago had recorded seven cases of the COVID-19, all of which have been described as “imported” cases.