Finance Minister reiterates “no devaluation” of local currency

Finance Minister reiterates “no devaluation” of local currency
10 Nov

The Barbados government Friday reiterated that it has no intention of devaluing the local currency with the Barbados dollar now valued at US$0.50 cents.

Finance Minister Chris Sinckler, speaking at the annual conference of the Institute of Chartered Accountants of Barbados, said that several buffers are now in place to prevent a devaluation of the local currency.

In recent times, the Freundel Stuart administration has disagreed with positions adopted by several economists including former prime minister Owen Arthur that the island should seek to engage in a programme with the International Monetary Fund (IMF) to help revive the economy. Economic observers have also urged a devaluation of the dollar.

But Sinckler, who has already made it known that the government would not adopt such a policy, said “it is true that the reserves position, the bed rock of maintaining the desired peg against the US dollar, is as I highlighted before not in the most comfortable position.

“However, the reserves, just about eight weeks of imports, are yet enough to defend the local currency,” he said, adding “Barbados still possesses…second tier resources…which are held by other financial and commercial institutions externally which we can tap into if necessary.

“And we do not anticipate such a move however will be necessary but we must ensure that that will not be the case,” he told the conference.

Sinckler said that the government would soon be making public the “Barbados Sustainable Recovery Programme” and that the draft would be available from next month.

He said the plan would include legislation and would ultimately reduce the cost of doing business across several sectors here.

“The broad objective of the plan, which will be revealed as I said shortly and will be given to all of you here, rest on the following: to boost our foreign reserve earning by creating more attractive conditions for foreign direct investment through a standardised investment inventive regime that is strengthened by incentive legislation and a reform implementation mechanism across public and private sectors.

‘In this regard I think I should say without letting out too much at this stage that we are going to bring legislation to rationalise all of the incentive regimes,” he added.


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