Jul 2009 Financial News

US-TT selling rate spikes

Jul 20, 2009

Foreign exchange customers yesterday paid the most they have had to spend for United States dollars in half a year.

The US-TT dollar selling rate spiked to TT$6.357 for US$1 at commercial banks across the country yesterday.

It is the highest the exchange rate has been in at least six months, a senior banking official said.

The rate has been maintained within a range of TT$6.28 to TT$6.32 for several years, largely through injections of US currency to support demand.

Most of the US currency into the financial system comes from energy companies converting revenues on a quarterly basis and this traditionally supports much of the demand for US dollars.

However, the global economic downturn that swept through Trinidad and Tobago and especially companies in the energy sector, has taken a toll on the revenue generation capacity of oil and gas companies operating here.

Since the beginning of 2009, the Central Bank has found itself injecting more US cash to meet local demands, Roopnarine Oumade Singh, general manager-Treasury at Republic Bank told the Express during a telephone interview yesterday.

The Central Bank has sold almost US$1 billion into the financial system so far this year, almost twice as much as it did all of last year, to support demand, he said.

This has been largely caused by a slowing down in the energy sector and continued demand for US dollars by traders and importers, Oumade Singh said.

He said the banks had settled on the TT$6.357 rate based on the rate the Central Bank sold US dollars to the banking system. This ranged from TT$6.24 to TT$6.25.

Oumade Singh said even though the TT$6.357 figure was the highest in at least six months, it was not something to panic about and the exchange rate remained stable.

Article by:Curtis Rampersad Business Editor
Published: Saturday, July 18th 2009
Source: Trinidad Express
http://www.trinidadexpress.com/index.pl/article_business?id=161505958