Enill: TT on sound financial footing

Trinidad and Tobago is on sound financial footing, with a stable foundation for sustainable and equitable economic growth, according to Conrad Enill, Minister in the Ministry of Finance.

“Financial indicators for the commercial banking system suggest that the system is sound and adequately capitalised. The Government has avoided destabilising fiscal imbalances and high levels of public sector debt, maintaining its position as one of the few countries in Latin America which issues sovereign bonds rated at investment grade,” said Enill. He added that in April 2003, Standard and Poor’s upgraded the country’s investment grade rating to BBB from BBB. Enill was speaking at the launch of Intercommercial Bank’s Signature Portfolio as part of its private banking service, at the Crowne Plaza on Monday night. He said the expansion of savings and investment is a critical public policy objective since it directly affects the growth and development. “We are also aware that if economic growth is to be encouraged, investment has to be financed not only by domestic but also by foreign savings,” said Enill. He added that from 1998-2002 gross national savings relative to Gross Domestic Product averaged 24.5 per- cent an increase from the previous five -year period. Foreign Direct Investment also increased to US$629 million over 1998-2002 from the previous five years. “I have no doubt that the increasingly healthy growth of domestic savings and the performance of foreign direct investment have limited the country’s need for debt creating flows from international capital markets and thereby ensured the stability of TT’s external debt,” said Enill.

According to Enill, the Government has been promoting the savings culture by establishing good macro-economic conditions through the formation of the Securities and Exchange Commission, the Trinidad and Tobago Stock Exchange, the Deposit Insurance Corporation and the Unit Trust Corporation. The Government is also in the process of reforming the financial sector starting with the evaluation of comments from the national community on the Final Report on the Financial Sector, said Enill. “We intend to proceed urgently to put in place international best practice codes and standards covering the financial sector, in particular areas relating to banking and insurance supervision as well as securities regulation,” said Enill. Also speaking at the launch was managing director of Intercom-mercial Bank Varun Maharaj. He said the portfolio will afford investors capital appreciation combined with income generation by offering them various investment instruments including fixed income paper, hybrid repo, bank index funds, bonds, money market funds, secured investment certificates and equities. Intercommerical partnered with Caribbean Money Market Brokers to develop the product. CEO of CMMB, Ram Ramesh gave a presentation on thriving in a declining interest rate environment. He said there has been a dramatic drop in the 90-day bill rates from 11.4 percent in early 2000 to 4.5 percent now. He gave a short term forecast of what the market would be like in the next couple of years. According to Ramesh, bonds will trade at a premium due to low interest rates, stock prices will rise and interest rates will remain flat. Ramesh said there is likely to be expansion in liquidity and possible inflation. He also predicted that the TT dollar will appreciate.