Image: Minister Chris Sinckler of BarbadosThis country’s foreign exchange reserves have been stabilised. Word of this has come from Minister of Finance and Economic Affairs, Christopher Sinckler, in the House of Assembly yesterday morning as he led off the debate on a resolution to increase the amount to be raised by the issue of treasury bills and tax refund certificates and tax reserve certificates to $4 billion.

The Government’s chief spokesman on finance and economic matters told the House of Assembly that while they have had some assistance by way of foreign borrowing last year and in the early part of this year to help bring the reserves back up; outside of those loans, Government has seen “a levelling off and a plateauing” of the significant decline in the country’s reserves.

The Finance and Economic Affairs Minister is adamant that those significant and steep declines have now been halted; disclosing also that in some weeks, they have actually seen small growth. “We are cautiously optimistic, Mr. Speaker, that that condition will continue throughout the course of this year, even though we are not predicting great economic growth for this year. And why we are confident about that? Because we are now seeing that we have returned to a situation, due to the measures that we are implementing, that constrict the demand for foreign exchange by reducing the level of imports, Mr. Speaker Sir, for goods and services,” he said. With that in mind, he said the ultimate goal is to grow the foreign exchange so that they have more of a surplus, which can then be fed into the reserves, so that the reserves can start to rebuild and get back to normal levels.

Mr. Sinckler indicated that the Medium Term Growth and Development Strategy has a trajectory of getting the reserves back up to 19 weeks of imports by the end of 2016, and beyond that, to move it up to $2.6 billion overall two years after. “Our principal goal in the context of what we are dealing with now, as it has been over the last couple of years, is to ensure the stability of the Barbados economy by ensuring that we maintain adequate levels of reserves [and] that we have adequate levels, or enough levels of fx [foreign exchange] earnings to be able to carry out our transactions and do what we have to do from the earnings, so our reserves can remain at a certain level that would give us the import cover that we require,” the minister stated. To that end, he said that over the last four years Government has done a reasonably good job in that regard. Meanwhile, speaking specifically to the resolution, the minister said that as long as Government continues to run a fiscal deficit that is too high, they will have to increase the limit in relation to the debt that can be incurred, so that they can finance the operations of Government.