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Doma: Less control over forex distribution needed not more
The Downtown Owners and Merchants Association (Doma) is calling for changes to be made to the existing system for disbursing US currency.
The business group said in a statement yesterday that they noted with "some apprehension" comments made by the Minister of Finance that government may soon have to exert greater control of foreign exchange distribution.
Doma added that it shared similar sentiments with former chairman of the Economic Development Advisory Board Terrence Farrell that "there is need for less control of foreign exchange distribution instead of more control."
The association stated that a fixed exchange rate would lead to a loss of confidence in the TT-dollar.
Doma's comments come on the heels of TTMA stating that there should be consultation if changes are to be made to the system for disbursing US curency.
Doma said: "it is tragically predictable that the current mechanism of foreign exchange management with a fixed exchange rate as it's main feature is going to lead to a loss of confidence in the TT-dollar and a shortage of availability, as more and more holders of foreign exchange seek a more realistic value for their hard currency assets."
Substantiating its point, Doma said the shortage of US currency is having an impact on prices of certain goods.
The business group said it does not advocate "drastic adjustments" given the prospect of rising unemployment, but insisted that, "managed adjustments are needed."
The group suggested that the Government should consider "listening to alternative arguments to the exchange allocation policy in use at this time" stating that the "current model will create an economic predicament that will have dire consequences in the not too distant future."
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