Mottley seeks answers on ‘falling reserves’
Opposition Leader Mia Mottley has warned that Barbados’ foreign reserves are dropping again to dangerous levels and she wants answers from Central Bank of Barbados Governor Dr Delisle Worrell.
Against the backdrop of Government’s recent assurances to the International Monetary Fund that it had no need for international financing, she told a Barbados Labour Party rally last night that Worrell and the Government must clarify the situation for all Barbados.
“I want the Governor of the Central Bank tonight to tell us whether he is in a position to confirm to Barbadians whether the reserves – even though $300 million was borrowed [from] Credit Swisse under the worst conditions of any loan, and even though at the end of last year, December 31, they went up to 1.16 billion – that tonight they have dropped below $1 billion again in this country in less than seven weeks.”
Mottley’s statement that the reserves have fallen below the $1 billion mark is a follow-on to a contention earlier this month by her and BLP economic advisor Dr Clyde Mascoll that over $100 million had seeped out of the reserves in January.
In a January 27 release titled Analysis Of Barbados’ Current Performance, the bank stated: “At December 31, foreign exchange reserves were the equivalent of 15 weeks of imports of goods and services.”
Based on the international standard used by the IMF, the minimum reserves to be held by Barbados for imports of goods and services, is three months (12 weeks) or $900 million.
Falling below that figure would represent a threat to the value of the Barbados dollar.