RBL tightens controls on US dollar sales

In a media release yesterday, RBL said it had “tightened controls in the sale process, referring all requests for foreign currency to the bank’s foreign exchange department for approval.” This followed reports that it had suspended sales of foreign currency at all is branches.

RBL said it was justified in taking the action because the foreign exchange market “has been experiencing a higher demand for US currency than the available supply, and with the bank currently holding the largest market share, it has therefore been met with the biggest need to satisfy its customers’ requirements.” 

The bank the situation had put a strain on its resources and to ensure equitable distribution of the available supply to its customers, the tighter controls were put in place.

RBL managing director David Dulal-Whiteway, an in emailed response to the T&T Guardian about the likely duration of the tighter forex controls, said: “We will keep reviewing the situation.”

However, the T&T Chamber of Industry and Commerce took issue with the bank for improperly communicating its decision saying that it caused panic among the business community and the public.

The Chamber said in a statement: “We strongly reiterate the value of clear and timely communication from all relevant stakeholders in pre-empting speculative reactions.”

The Chamber called on the Central Bank to work closely with local banks to satisfy foreign exchange demand, noting that the forex supply situation has caused major problems for the business community.

Also commenting on the situation was Downtown Owners and Merchants Association (DOMA) president Gregory Aboud who called on the Central Bank to act with dispatch to restore confidence.

”As the largest of our commercial banks and an indigenous bank of the highest repute, this unprecedented action will be taken very seriously locally and internationally,” Aboud said of the action taken by RBL.

He also expressed concern about the “gap between what is being said by the Central Bank and what is being experienced by the business community with respect to the availability of foreign exchange.” 

“The repeated pronouncements by the Central Bank that the supply of foreign exchange is adequate and the equally opposite experience of shortage in supply by the business community is creating constant speculation and  now even suspicion,” he said. Another commercial bank, First Citizens, said it does not plan to make any changes to its foreign exchange distribution mechanism and that the needs of its customers were first priority.

“First Citizens, as it always has in the past, continues to work with our clients to understand their needs and to work with them within the system constraints to provide for these needs,” the bank said.

In a statement late yesterday, the Bankers Association of T&T (BATT) pointed out that demand and supply for foreign exchange are not determined by commercial banks.

“It must also be noted that the issues regarding the availability of foreign exchange have been well ventilated nationally, and BATT has, on more than one occasion, commented on these issues and their implications on the financial system, our clients and key stakeholders.” the group said. 

“BATT recognises that financial institutions are entitled, and in fact expected, to actively manage their foreign exchange positions and to take the decisions they deem necessary in this regard.  Ultimately, we trust that these decisions will be guided by the best interest of their clients, key stakeholders, and the nation as a whole.

BATT said it will continue to monitor this situation and will work with its members and the Central Bank in managing the issues related  foreign exchange.

 

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