No devaluation

Sinckler insists currency will not be weakened

Minister of Finance Chris Sinckler today sought to dismiss anxieties that Barbados would be forced to devalue its currency and enroll in an International Monetary Fund (IMF) programme to address the country’s fiscal challenges.

Responding to concerns by President of the Barbados Chamber of Commerce and Industry (BCCI) Eddie Abed about the impact on the economy of recent downgrades, Sinckler said the ratings agencies wanted to push the country towards the IMF.

However, he told the association’s business luncheon at the Lloyd Erskine Sandiford Centre, while the country was at crossroads, it would not fall into the arms of the IMF, nor would it devalue the dollar.

“They would prefer Barbados do an IMF programme. They don’t say that openly but we know that is what they really want. The problem with that is that an IMF programme may get through the staff of the IMF without a currency adjustment or what we call a devaluation, but it is not going to get through the head office or the front office without one. At least I don’t see how that is going to be possible,” Sinckler said.

“We have all agreed that the currency adjustment and devaluation is not, and will not, be in the best interest of Barbados. We simply cannot afford the luxury of having an exchange rate adjustment. So we are at a stalemate. So their position is, ‘you have to get your deficit down’ to what they call management levels . . . at least at the rate of growth, preferably below the rate of growth, so that it adds no more to the growing levels of debt. The issue is, as we have said in several Budgets, documents and speeches I have made, that our target is to get to that stage. The issue is how quickly do you get there.”

The Minister of Finance put the business community on notice that the Central Bank’s third quarter review would be presented in less than two weeks, and in addressing the matter it would present “a comprehensive review of the direction of our economy relative to growth”.

“I say this point with all degree of seriousness because I think it must be said loudly and clearly, our dollar remains stable even in a world of currency volatility and it shall and remain so for several generations to come. Our foreign reserves levels are adequate to defend our currency and will continue to improve going forward. We are confident about that,” he stressed.

The minister made it clear he was not burying his head in the sand, acknowledging that the island was going through “a very rough period” and the economy was struggling due to an unmanageable deficit, “unprecedentedly” high debt levels, infrastructure that was under “significant” stress, “uncomfortably high” unemployment, especially among young people, and a “severely challenged” social development services platform.

However, Sinckler urged Barbadians not to become dismayed, stating that with a booming tourism industry, strong and well-regulated international business and financial services sector and growing investment in green energy, the economy was still “fundamentally good”.

“There are challenges but we have the basic systems in place well ahead of many other jurisdictions in the world,” he concluded.

5 Responses to No devaluation

  1. Hal Austin October 5, 2016 at 3:56 am

    Sterling, our biggest tourism market, has been devalued by 20 per cent since June 23, against the Barbadian dollar. In other words, people who might have been thinking of holidaying in Barbados may well review their plans; if not they will hesitate to spend as much as they had planned.
    Is Mr Sinckler happy with Janet Yellen setting our monetary policy?
    Apart from not devaluing, what is his master plan?

  2. Alex Alleyne October 5, 2016 at 6:06 am

    When and if that time comes, I do hope the ones that calling for it can handle it. For sure I know I cannot cause i struggling as is…..right-now.

  3. Carson C Cadogan October 5, 2016 at 7:04 am

    Chris, how many times are you going to have to tell these idiots that?

  4. Phil October 5, 2016 at 11:15 am

    I made a comment related to an experience I had with Customs in Barbados. and Barbados Today posted It and then removed that post. But never mind, I have told that story to almost every business associate I meety both in Barbados and abroad, My fellow Rotarians and to my Lodeg Brothers. Thank you BT. You can’t hide the corruption. I also know a good friend who bought a BMW duty free and a customs officer called him and he had to pay $10,000,00 It was collected by the Politian who sold him the vehicle and passed on. That politician is also a JP. That vehicle is now 15 years old. and all taxes were paid. My issue here is not with Customs nor the vehicle salesman, It is with Barbados Today. Oh, My advisors to this mail, one is a senior majestrate and the other a retired High Court Judge , and I know many other QC’s

  5. Ossie Moore October 6, 2016 at 2:32 pm

    I see the senior Central Bank staff with many sleepless nights locked in not seeing the Sun for endless months and so it was said by the profits! The nation is now putting you to Public Work! I gone!


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