Central Bank Governor has concerns over foreign exchange issues

BRIDGETOWN, Barbados, Jan 6, CMC – The Governor of the Central Bank of Barbados (CBB), Dr. DeLisle Worrell says the island has failed to achieve a balance between foreign exchange inflows and outflows, which is the foundation for growth in a stable economy.
Worrell in his January economic letter, titled “We are the Craftsman of our Economic Fate” noted that this situation has existed since 2013.
“We know when we have achieved that balance because in that case we do not have to dip into the Central Bank’s reserves of foreign currency to make up the difference.
“The country has failed to achieve that balance since 2013 and there remains a need to dampen spending further in order to protect the country’s reserves of foreign exchange,” Worrell wrote.
He said the reserves are what protect the country from the devaluation of the local currency, adding that the Central Bank remains in a position to provide US dollars “at the 2:1 exchange rate to meet all legitimate needs, if no other source is sufficient”.
Worrell said the Freundel Stuart government is committed to a further reduction in the fiscal deficit in order to relive pressure on the foreign exchange reserves.
“The immediate objective is to set the debt to GDP (Gross Domestic Product) firmly on a downward path by achieving a deficit which is lower than the increase in GDP forecast for 2017.”
Worrell said that will serve to boost confidence and give access to funds from banks and other investors whose contributions to government finances has not increased in recent years.
The CBB governor said the tourism sector, the international business sector and the export of  world renowned rums and other products as well as renewable energy account for the island’s foreign exchange and the drivers ‘of our open economy”.
In his letter, Worrell repeated an earlier statement reminding Barbadians that independence means that that the future of the island remains firmly in their hands.
“That future is exceptionally promising but it will not happen unless we make it happen and like all worthwhile objectives, realising the vision will not be painless,” he warned.
The Central Bank is expected to release a review of the island’s economic performance on January 24.