Trinidad & Tobago’s Central Bank Maintains Repo Rate

Despite an increase in inflation, amid generally stable global economic conditions, the Monetary Policy Committee of the Central Bank opted to maintain the repo rate at 3.50%.
In the Monetary Policy Announcement for June 2024, the MPC said, “Domestically, the low level of inflation and buoyancy of credit were supportive of the ongoing economic recovery, although the negative interest rate differential warranted close monitoring given its potential impact on the country’s external balance.”
In Trinidad and Tobago, the latest data from the Central Statistical Office (CSO) showed that headline inflation rose to 0.9% (year-on-year) in May 2024 from 0.5% one month earlier. With core inflation (which excludes food prices) unchanged at 0.3%, higher food prices were primarily responsible for the upward drift of inflation. Food inflation accelerated to 3.1% in May compared with 1.1% in April 2024 on account of price increases for several locally produced and imported food items.
Further, the MPC stated there are positive signs in terms of domestic economic recovery, “Production indicators monitored by the Central Bank during the fourth quarter of 2023 and into the first three months of 2024, such as local sales of cement and new motor vehicle sales, point to vibrancy in some non-energy sectors. Meanwhile, data from the Ministry of Energy and Energy Industries indicate that crude oil and natural gas outputs from the mature fields continued to slip over this period. “
In terms of the financial sector, the MPC stated that the liquidity in the financial sector remained “ample” despite figures dropping slightly compared to last year.
Finally, the report noted that interest rates on three-month treasuries in T&T continued to trend upwards, rising by 27 basis points (bps) since February 2024. That resulted in the differential between T&T and US three-month treasuries moving to -4.06% in May 2024 from 4.32% in February.

(Source: Central Bank of Trinidad and Tobago)