Trinidadian Central Bank To Hold Interest Rates In H221 Amid Contained Inflation Before Hiking In 2022

• After cutting its benchmark policy rate by 150 bps in March 2020 in response to the economic impact of the COVID-19 pandemic, the Central Bank of Trinidad and Tobago (CBTT) has decided to hold its benchmark monetary policy rate at 3.50% through end-2021 in an effort to support Trinidad and Tobago’s economic recovery. 
• At its June 25 monetary policy meeting, the CBTT cited the modest economic recovery and weak credit growth for continuing its accommodative stance. Although Fitch forecasts real GDP growth of 4.4% in 2021, the economy will remain 12.1% lower than its peak in 2015. 
• Fitch Solutions forecasts that inflation will remain sluggish in the quarters ahead, averaging 1.4% in 2021 and 2.1% in 2022, as weak economic activity limits price pressures. 
• Subdued domestic inflation and accommodative policies by global central banks will allow the CBTT to gradually tighten monetary, hiking to 3.75% by end-2022.

(Source: Fitch Solutions)