RESERVES PUSH

The strengthening of international reserves is needed to ensure that the reserve buffer remains adequate in order to protect the fixed exchange rate peg.

This comment was made by Acting Governor of the Central Bank of Barbados (CBB), Cleviston Haynes, during a press conference that was held at the headquarters yesterday morning.

“At the Bank, it goes without saying that we are concerned about the direction in which the reserves have been going. It is the first issue we addressed because we consider that is a very important issue for us, considering these reserves act as a buffer for the exchange rate peg that we’ve held over 40 years and which we believe is consistent with the future long-term growth of the Barbadian economy,” he said.

Haynes expressed that in order to change the direction in which the foreign exchange was moving, the issue of reserves must be addressed on two sides. He explained that some fiscal measures have been implemented and assigned to address the demand side of reserves, such as the introduction of the National Social Responsibility Levy and the Foreign Exchange Fee.

While the introduction of these measures were doing their job to address the demand aspect of reserves, Haynes stressed that he believed it was critical for persons to also look at the supply side of reserves as well. He believed it was also important to get the private sector investment projects going as well as those which would contribute to the build-up of our foreign reserves situation.

“Those are measures to address reserves in the short term, but I think we also have to develop a more medium- to long-term strategy because we don’t want to look at things solely from a March to December 2018 perceptive; we also want to develop a consistent and coherent programme as we go into the medium term,” he said.