Central Bank Governor: Barbados dollar ‘far off’ from devaluation
The talk of devaluation has been floating around within political and business circles and has grown stronger since the Central Bank (CBB) 2016 Economic Review was released last month revealing that Barbados’ foreign exchange reserves had fallen below the standard 12-week import cover.
On two separate occasions, Prime Minister Fruendel Stuart and Minister of Finance Chris Sinckler spoke clearly to the potential of the dollar being devalued, stating the current administration will not allow such to happen.
Last night, similar assurances were given by the CBB Governor, Dr. Delisle Worrell during the ‘Economic Forum: It Matters Fiscally’ panel discussion.
Speaking on Government’s growing fiscal deficit, Dr. Worrell said the government needed to address it with haste to prevent foreign reserved from "eroding" and shut down any possibility of currency devaluation.
“We are a long way from the possibility of devaluation. But the question is that, if we don’t stop eroding the foreign exchange - we will. The reason is that the foreign reserves protect us from devaluation because I am still in the position where the Central Bank is able to reassure all Barbadians that if you have a legitimate need for foreign exchange and you can’t get that foreign exchange else anywhere else in the system, I will sell you that foreign exchange.”
President of the Barbados Bankers Association, Donna Wellington, said she believed the talk of devaluation was unfounded, adding such a move will not "profit Barbados at all".
“We are an import economy and if we are importing food and other things for the hotels it is very difficult to see how devaluing the dollar would not just inflate every cost you have.”