Enill: TT financial assets have tripled

Addressing the opening of a Caribbean Centre for Monetary Studies seminar at Hilton Trinidad, Enill attributed the healthy status of TT financial assets to rapid growth in the national financial system since TT started a programme of trade and financial liberalisation in the early 1990s. The minister said since then, "we have witnessed the emergence of a number of financial conglomerates that have been diversifying and expanding the range of their product offerings in both the domestic and regional markets." He added that due to buoyant energy prices, TT experienced a 6.2 percent in Gross Domestic Product in 2004, US$734 million balance of surplus payments in 2004, and an improvement in Government’s fiscal accounts. However, Enill said unlike the 1980s (when the TT economy was characterised by slow growth, relatively low reserves and a liquidity deficit), recent surpluses on the balance of payment accounts have led to an increase in TT’s holdings of foreign reserves and a build-up of liquidity in the domestic financial system.

Enill said Government is committed to managing liquidity in TT’s financial system, through the development of money/capital markets, a "financial architecture that can support and sustain the efficient execution of these policies," and Government’s recent establishment of a Revenue Stabilisation and Heritage Fund was a key component of this architecture. "We (Government) propose to invest a portion of the surplus revenues emanating from the energy sector into an investment portfolio consisting of international and domestic securities that would provide a future stream of income when our oil and gas reserves are exhausted. Through this mechanism, we are able to lock away some of the excess liquidity that exists in our domestic financial system," Enill stated.

He explained that by allowing investors to source funds from money and capital markets, "excess liquid resources can be channelled into viable projects, especially in the non-energy sector, thus contributing to the greater diversification of our productive base and eventually to the overall growth in national income."

Enill said Government’s financial sector reform programme is well on track through initiatives such as the upgrading of relevant legislation, establishment of the Financial Services Ombudsman and an automated credit bureau. The minister added that an automated clearing house, to facilitate faster and more efficient processing of inter-bank credit and debit payments, will be established later this year. Enill reiterated TT’s commitment to the Caribbean Single Market and Economy, noting that domestic firms made investments totalling US$299 million in the Caricom region from 1999 to 2004. He also said regional governments and other private sector entities had raised nearly US$1.1 billion on TT’s capital market.