Let supply, demand decide exchange rate

This has resulted in the Chamber of Industry and Commerce and the Downtown Owners and Merchants Association (DOMA) condemning any such move and calling for the minister to truly float the dollar instead and let supply and demand determine the true exchange rate, and therefore let the exchange rate determine the demand.

I completely agree with the Chamber and DOMA, in that the correct move would be to let the dollar truly find its own level.

Politicians, however, sometimes have different concepts, and attempt to restrict inflation and the resultant hardship on the vulnerable in society by artificial economic means. If, therefore, the Government continues to support the dollar, then it is interfering with the principle of demand and supply and the result will be increased demand due to an artificially low exchange cost.

Jump high or jump low, local manufacturers continue to generate employment in this fragile economy.

They generate export earnings that are vital for the economy.

Even those who only manufacture for local consumption positively affect the balance of payments by reducing the import bill.

One of the pillars of diversification is manufacturing. When manufacturers, especially small manufacturers, have to compete for forex in a (supposedly) open market against the country’s credit card bill and the big boys, Massy, McAL, Bryden, PriceSmart etc, the result is obvious — the small manufacturer suffers.

When the manufacturer cannot access forex to settle his suppliers, he closes down.

Simple.

If the Minister of Finance does not intend to fully float the dollar, then he has a responsibility to the manufacturers to ensure they are able to pay for their bona fide raw materials.

L ike the Chamber and DOMA, I understand this can result in mismanagement.

However, the Government has two State companies, the Export Import Bank (Eximbank) and exportTT .

ExportTT is currently vested with certifying that goods meet the local content for Caricom. It can also be tasked with certifying manufacturers’ bona fide suppliers.

This certificate, along with the manufacturers C-82 Form when the raw materials are imported, can be presented to Eximbank.

The bank can then settle the invoice out of the forex intended for manufacturers.

TT is going through a very hard time that will not be short-lived.

The country is no longer earning the foreign exchange that it once enjoyed. We the citizens have to adjust.

We have to reduce our demand for imported products and services, and urgently support our local industries, both service and manufacturing.

Andrew Dalgliesh Diego Marti