‘No danger’

THE Barbados dollar is in no danger of being devalued.

Minister of Finance and Economic Affairs, Christopher Sinckler, made this clear at a press conference yesterday in the Cabinet Office at Government Headquarters, as he dismissed claims that devaluation was imminent. Such claims, he suggested, are aimed at creating an environment of panic and fear through the “peddling of unsubstantiated and unnecessary doomsday, apocalyptic scenarios”, which he contended have no factual basis.

“These fake prophecies designed with the sole intent of destabilising the Government, have the potential to do serious damage to the economy
of Barbados by undermining the confidence of potential investors, and weakening the resolve of fellow Barbadians to work together to keep our recovery going and tackle the most stubborn of our challenges head on,” he told journalists present.

Describing such actions as irresponsible and uncalled for, Sinckler maintained that there is “absolutely no danger” vis-à-vis the local dollar’s standing against the United States dollar.

“It is not going to happen next week, next pay-day… next three months, next year or at any other time in the foreseeable future. This is simply not going to happen,” he affirmed.

The Finance Minister added that though foreign reserve levels have temporarily fallen below the 12-week standard threshold, this is not the first time such has happened in the country. According to him, the economy successfully operated with lower levels of reserves in 1998 and 1999, where the reserves stood at 9.1 and 9.9 weeks respectively, and he explained that in neither of those cases was there ever a question about adjusting the value of our currency.

“Similarly, it is not a scenario that this Administration will permit to happen under its watch,” he contended.

His comments came as he indicated that there are three sources from which the reserves should get more than $200 million in the not too distant future, which should up the levels above the 12 weeks of imports. The inflows, he said, are expected to come by way of the $100 million from the sale of the Barbados National Terminal Company Limited, the first tranche of the drawdown from the Sam Lord’s Castle Loans from EXIM Bank of China and the release of the First Citizens Bank Bridging Loan for the Development Bank of Latin America sponsored upgrades to Customs and the Barbados Revenue Authority. The funds from the latter two, he said, should be released within the coming days.

He went further in his wide-ranging press conference that lasted over an hour and a half, to touch on a number of pertinent issues regarding the local economy. He admitted that while the country has recorded some gains on which it has to expand, it has also seen setbacks which have to be addressed. As such, he contended the country must be prepared to take any necessary, but sensible actions to contain the growth of our debt and bring about a faster reduction of the fiscal deficit. However, the Minister ruled out the use of a formal programme from the International Monetary Fund (IMF) to achieve that, though he said Government has been consulting the IMF on a number of areas.

“We do not at this time believe that is necessary for Barbados to enter into an International Monetary Fund programme, whether standby or structural adjustment or by whatever terminology... We have worked very closely with the Fund on a number of issues, both in terms of the fiscal programme, the home grown programme... they have come here more often than perhaps they visit most countries of the type of Barbados, and they have worked with us through a number of areas,” he stated.

He noted then that to get the economy fully back on track and reach the targets Government has set, among other things they will be looking at a targeted programme of debt refinancing. The Minister remained mum on the details, but did disclose that Government had “firm offers” from regional and extra-regional “reputable financial institutions” to examine Barbados’ domestic debt profile. (JRT)