This is what I got so far from the my investigation.
Rumor is that there is already a shortage of US Dollars at the bank,This coming from mega supplier of lumber and hardware materials in Trinidad.
TT’s rainy day has come
By CLINT CHAN TACK Thursday, January 15 2009
GOVERNMENT will run a temporary $1.7 billion deficit and base the 2009 Budget on a new revised oil price of US$45 per barrel, as part of new measures to protect TT from “the real possibility of a deepening worldwide recession.” This new oil price is US$25 less than the original price of US$70, on which the 2008/2009 Budget was originally predicated.
In making these pronouncements at yesterday’s sitting of the House of Representatives, Prime Minister Patrick Manning declared: “The rainy day as we used to describe it. Now that day has come, we find ourselves quite well prepared to handle that eventuality.”
The Prime Minister said there will be no devaluation of the TT dollar; no withdrawals from the Heritage and Stabilisation Fund (HSF), no cuts in wages and salaries; pension benefits; senior citizens grants; disability grants and social assistance grants. “Most importantly, all programmes dealing with the fight against crime will be continued,” he declared, as Government MPs pounded their desks.
After consultation with the Central Bank, Manning said, Government decided to adjust the Budget’s oil price again from US$55 to US$45 per barrel but maintain the revised US$3.25 per mmbtu gas price. The Budget’s original oil price was US$70 per barrel last September but was revised to US$55 per barrel two months later. According to these new revised estimates, Manning said Government will receive $42.2 billion in revenues, $7.2 billion less than projected in the Budget. The new expenditure will be $43.9 billion, $5.6 billion less than the original Budget. Declaring that “standing still” was not an option for Government as the crisis unfolds, Manning said: “We will continue to trim expenditure and recognising that we cannot totally compensate for the revenue shortfall, we will also run a temporary deficit. That is to say, we will fund a part of our expenditure out of our not inconsiderable savings.”
Ignoring taunts from Opposition MPs that all of the $18.2 billion in the HSF would be spent to finance the projected deficit, the Prime Minister countered: “We have been saving for quite some time for an eventuality such as this.
“With the Central Bank having US$9.2 billion in official reserves and deeming the temporary deficit as quite acceptable, Manning said: “The Government will issue bonds in order to finance the deficit without compromising our economic fundamentals. We are able to do this because over the years we have realised a significant build-up of savings as well as growth in our foreign reserves position which could more than adequately meet the necessary payments on our sovereign debt.”
He said while Government could withdraw money from the HSF, “we have decided to raise the money by bonds on the domestic market” which was far more acceptable given the market’s high liquidity. “The limited deficit financing and the adverse export outlook will also not affect our commitment to exchange rate stability. Therefore, we have no need now to go talking nonsense about a devaluation of the currency. It is just not on the cards,” Manning declared.
Noting that the US plans to add a US$1 trillion stimulus package to a US$700 billion bank support programme already implemented, Manning said TT did not have to resort to such measures because it was in a better position to weather the crisis, than most countries. “Our confidence comes from the strength of our economy which in spite of difficulties caused by global developments performed quite creditably in 2008.” Manning said while there was a decline in activity in the energy sector between 2007 and 2008, “growth in the non-energy sector remained robust at about eight percent due to both public and private investment and entrepreneurship.”
He said while unemployment fell to a historic low of 4.5 percent in the last quarter of 2008,
a sizeable increase in interest rates could increase this figure and negatively affect private sector activity if allowed to continue too far. Manning reiterated that “the silver lining” for TT in the crisis is lower levels of inflation and food prices. He identified the temporary closure of some plants at Point Lisas, postponement on the start of construction of new energy plants and reported low retail sales last month as signs that the crisis is affecting the country.
Note last year when the public call for information concerning the US economic crisis and how it affects us .The Prime minister along with head of Finance said that we are immune to the economic fall out . Two months later press conferences were called to state the realities which did look as favorable as before.
Note now is no time to depend on The leaders to give sound advice.
All of Trinidad and Tobago must buckle down now. Daniel 12:1... It is coming.