An article published in the Barbados Today (21 July 2011) was startling more by its revelation than content. The article titled First Choice boldly asserts in its intro, “Thanks but no thanks. That appears to be what an increasing number of businesses and individuals buying about $600 million in foreign exchange each month are telling the island’s seven commercial banks, preferring to buy their foreign cash from the Central Bank of Barbados”. It is obvious the author (SC) got it wrong.
To the credit of Barbados Today reference was made to a Central Bank Report – Central Bank Intervention in the Barbadian Foreign Exchange Market (page 46 ) which is cited as the source of the author’s revelation. BU has scoured the Central Bank report several times and is unable to find a supporting basis for Barbados Today’s conclusion. The regulatory framework which has the Central Bank as the regulator and commercial banks the financial intermediaries exist. For the author to suggest that an increasing number of business and individuals are turning to the Central Bank to buy foreign exchange is inaccurate and irresponsible journalism at its highest. What it confirms is the dearth of journalistic talent generally but specifically in the realm of financial reporting.
The Central Bank report penned by the Governor of the Central Bank, Michelle Doyle-Lowe and Mahalia Jackman more accurately concludes after a “recent evaluation of the Central Bank’s sales and purchases of FX suggests that there may be some inefficiencies present in the Barbadian FX market, whereby banks no longer sell their daily surplus on the market” . Contrary to Barbados Today the correct conclusion to be drawn is that the Central Bank has had to be a seller of last resort to satisfy foreign exchange demand, a position which it finds puzzling, see extract from the report: as a last resort for sales and purchases of FX, the Central Bank must be willing to provide the full amount of FX that dealers are unable to source on the market, and only intervene in periods of excess deficits or surpluses.
The report as computer geeks would say is written in ‘clear text’ with only a smattering of economic lingo. It boggles the mind that Barbados Today which described itself as a serious media outfit when it separated itself from the social media would have presented such an erroneous interpretation of the Central Bank report. Usually BU gives Barbados Today a ‘pass’ because it is in a nascent stage of development. However the adage spare the rod and spoil the child comes to mind.
A careful reading of the Central Bank report gives the uncomfortable feeling that there is a pressing need for us to become more efficient in our foreign exchange management. It is after all too critical a resource to Barbados’ economic viability to be signalling the level of discomfort which the Central Bank officials seem to suggesting in the report.
The honourable thing to do is for Chief Editor Roy Morris to withdraw the article.
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