Call the IMF for forex answers | Local news

A LOCAL businessman has written to the International Monetary Fund (IMF), calling on the body to intervene in Trinidad and Tobago’s currency crisis and hold the government to account for its lack of transparency, which is having serious consequences for businesses.

Rajnanan Ramsaran, owner and founder of Ramsaran Dairy Products, sent a ten-page letter to the Executive Director of the IMF on October 18, 2024, raising the alarm over the lack of data on policies related to forex.

In subsequent letters, Ramsaran also wrote to Auditor General Jaiwantie Ramdass requesting urgent action, and to Central Bank Governor Dr Alvin Hilaire requesting information on currency distribution.

“This letter seeks to draw attention to the glaring transparency issues and governance failures that hinder economic growth and violate international standards – issues that directly affect not only entrepreneurs like me, but the economic stability of the entire country,” Ramsaran’s letter to the IMF said .

He said there is an “extreme shortage” of forex, and he tried to obtain information about the Treasury Department’s distribution policy through the Freedom of Information Act (FOIA) through his lawyer, Richard Jaggessar, but was told that “ no information was available”. on the issue”.

“The absence of these basic documents suggests that the Central Bank cannot effectively manage the distribution of foreign exchange or ensure compliance with international standards, raising concerns about corporate liability and responsibility,” he said.

Ramsaran noted that Trinidad and Tobago is a member of the IMF, and the ministry’s response indicated that these obligations have not been met, which may conflict with IMF reporting requirements.

“Given this alarming situation, we urgently call on the IMF to intervene and ensure that Trinidad and Tobago adheres to its obligations under IMF regulations,” he stated.

Unfair distribution

Ramsaran said there appears to be an unfair distribution of the little currency available, without equality or fairness among the business community and, by extension, the citizens of Trinidad and Tobago.

He said the FOIA request was intended to obtain information and requested several items, including any document detailing the total amount of foreign exchange allocated by the Central Bank to commercial banks for distribution in the local markets for the period 2015 -2023.

He noted that the Ministry of Finance’s response dated July 29, 2024 stated that each of the requested documents (seven requests) could not be provided because they did not exist.

Ramsaran stated that the ministry’s claim that the requested documents do not exist raises serious concerns about the governance framework and corporate responsibility within Trinidad and Tobago’s public financial institutions.

‘Lack of corporate responsibility

“If the Department’s assertion is true, this situation reveals fundamental flaws in core principles of good governance, which undermine not only domestic regulatory requirements but also the country’s international obligations, particularly those imposed by the IMF,” he stated.

Moreover, if the Ministry of Finance is unable to provide such crucial data, it strongly indicates a lack of corporate responsibility, Ramsaran said.

“This could indicate that foreign exchange management in Trinidad and Tobago operates in an ad hoc or haphazard manner, without clear guidelines, procedures or checks and balances. Such a situation exposes the country to significant financial risks and undermines investor confidence,” he said.

He further stated that the absence of the requested documents also indicates non-compliance with the IMF’s governance and reporting standards.

Ramsaran said Trinidad and Tobago’s inability to maintain or produce data related to currency policies and audits raises questions about whether the country is meeting these international standards.

“This could have serious consequences, not only damaging to Trinidad and Tobago’s reputation on the world stage, but also potentially to Trinidad and Tobago’s suitability for future financial assistance or policy advice from the IMF,” he said while asking the IMF to confirm whether T&T cooperated in this. full compliance with its obligations under its regulatory framework.

Ramsaran stated that the government of Trinidad and Tobago has implemented legislation, including the Exchange Control Act, to comply with IMF international standards.

This Act, he noted, provides for the administration, regulation and supervision of foreign currency exchange in Trinidad and Tobago, and under this legislation the Central Bank has the mandate to license and supervise authorized foreign exchange dealers, including commercial banks and non-bank financial institutions. .

He said the Central Bank has granted licenses to a number of Bureaux de Change.

Ramsaran emphasized that there is a “non-negotiable legal expectation” that accurate data must exist.

He said the Exchequer and Audit Act unequivocally grants the Auditor General the authority to access all financial data, including those relating to state-controlled resources such as foreign exchange.

Letters to the Auditor General and the Central Bank

After writing to the IMF, Ramsaran also wrote to the Auditor General on October 20, 2024.

Noting Ramdass’ battle with the government over national accounts, Ramsaran said: “I must admit that your stand on public policy and corporate governance has strengthened my position on this issue. Given your own recent legal battle with the Treasury Department over the underreporting of billions in revenue, it is clear that systemic problems persist within the Department’s record-keeping and transparency practices.”

“Your firm stand against improper practices within the ministry and your commitment to protecting the integrity of the Auditor General are well known. These factors suggest that this situation warrants your immediate investigation as it undermines both local governance frameworks, such as the Exchequer and Audit Act, and international obligations,” he added.

He reiterated the need for the documents to demonstrate forex policies in Trinidad and Tobago.

Ramsaran told Ramdass that he had asked the IMF for intervention when he called on its office to take action to ensure that the Finance Ministry fulfills its legal and constitutional duties.

Letter to the Central Bank

In his letter to Central Bank Governor Alvin Hilaire, dated October 25, 2024, Ramsaran expressed “shock” that the Treasury Department claimed it had no information on a currency policy.

He stated that in the past it was this data that shaped policy.

He added that the Central Bank released $200 million to authorized dealers in the financial system in May 2014 to ease the current tightness in the domestic foreign exchange market.

And in May 2014, he said the Central Bank was releasing another $50 million to currency traders in anticipation of a seasonal decline in foreign exchange.

“The fact that this was done in anticipation of a seasonal downturn means that the Central Bank is monitoring foreign exchange and keeping historical data,” he said.

He called on the Central Bank to release the information.