Better days are coming

The projection is contained in the bank’s Monetary Policy Report for May 2017, released yesterday, in which it says that much of the prospect for growth depends on three natural gas projects, namely the Trinidad Onshore Compression project, the Sercan field and bpTT’s Juniper project which is likely to start production in the third quarter of 2017.

The report says that the additions to natural gas production will be welcomed by the downstream LNG and petrochemical industries which will benefit from more reliable gas supplies for their operations.

Gas-dependent plants on the Point Lisas Industrial Estate have lost millions over the last two years due to the shortage of natural gas.

The report states that inflation is likely to remain controlled because of the slow pace of the domestic economy — although flooding in some agricultural areas could exert mild pressures on headline inflation as a result of damage to fruit and vegetable production and consequent price increases.

It adds that liquidity in the financial system will remain adequate, but credit growth is likely to be muted in the face of soft business and consumer demand.

According to the report, the foreign exchange market continued to face pressures as the fall in export earnings as a result of the terms of trade shock was not matched by a fall in demand for foreign exchange.

The local foreign exchange market saw a decline in purchases of foreign exchange by authorised dealers from the public (non-Central Bank purchases) by 25.8 percent over the first five months of 2017, as energy sector conversions fell by 30.2 percent compared with the same period one year earlier.

Likewise, authorised dealers’ sales of foreign exchange were lower by 6.9 percent over the period January-May 2017.

The Central Bank reported that it continued to support the market with bi-weekly sales of foreign exchange to authorised foreign exchange dealers; in the first five months of 2017 the bank sold US$810.0 million to authorised dealers, an increase of 41.6 percent from the comparable period of 2016.

According to the report, the weighted average selling rate of the TT dollar was US$1 = TT$6.7802 in May 2017, remaining unchanged from December 2016.