Trinidad and Tobago’s foreign reserves have reached their lowest level since the Central Bank began recording such data, according to economist Marla Dukharan. She highlighted that the country’s Net Official Reserves (NOR) stood at US$4.6 billion at the end of August, equal to 6.6 months of import cover. Dukharan stressed that NOR is a vital measure of the foreign exchange available to protect the value of the Trinidad and Tobago dollar, as well as to fund imports and government obligations abroad. She noted that the current figure mirrors levels last seen in mid-2006, when the economy and population were smaller, yet the country’s import cover exceeded nine months, which is considered healthy.

Dukharan further observed that the reserves have been declining almost continuously for the past decade. She warned that the entire reserves position is now borrowed, meaning it will need to be repaid in US dollars with interest, creating a financial burden for future generations.

The Central Bank of Trinidad and Tobago recently corrected a reporting error that added confusion to the issue. The error suggested that the nation’s Gross Foreign Assets had plunged to their lowest point in two decades. In reality, the correct data showed an increase in Gross Foreign Assets in June 2025. These assets, which combine foreign holdings of the Central Bank, commercial banks, and the government, rose to US$9,784.1 million in June, up from US$9,588.4 million in May. The Central Bank apologised for the mistake, clarifying that the apparent decline had been the result of a publishing error on its website.

Despite the rise in Gross Foreign Assets, Net Official Reserves continued to shrink. They stood at US$4,904.5 million in June, dropped to US$4,806.7 million in July, and then fell further to US$4,610.2 million in August. By comparison, when former finance minister Colm Imbert presented the national budget in September 2024, the country had 7.7 months of import cover and US$5.5 billion in gross reserves. Imbert had described the nation’s fiscal buffers, including the Heritage and Stabilisation Fund valued at US$6.1 billion, as strong and resilient despite significant withdrawals during the pandemic.

Prime Minister Kamla Persad-Bissessar announced that her government’s first national budget will be presented in early October, although no date has been confirmed. She stated that the 2025/2026 budget will run a deficit, reflecting the economic challenges inherited from the previous administration. Persad-Bissessar explained that high levels of borrowing and limited fiscal space prevent the pursuit of a balanced budget. She added that the government would have to explore creative financing options while keeping the most vulnerable citizens protected and preparing the economy for recovery.

Source: (Trinidad Express)

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