Is Governor Delisle Worrell Preparing Barbadians for a Contraction in the International Reserves?
The Governor of the Central Bank Delisle Worrell posted a full colour page in today’s media titled “More Foreign Reserves are not Necessarily Better”, the thesis of which is, “Countries should maintain foreign exchange reserves sufficient to allow time to adjust to the vagaries of international markets, so that banks and traders do not become apprehensive about the value of the currency”.
While the theory of what Governor Worrell is espousing cannot be questioned, many have questioned the timing of the statement just before the half year Economic Review is due. Is his communication a presage of contracting forex levels for 2nd quarter?
The Governor et al must be emboldened by the response of Barbadians to the floating of savings bonds. While pro-government supporters have explained the bullish public response as a sign of confidence in the government, others hold the view – including BU – the prospect of low interest rates offered by banks is the main reason why several bond floats were oversubscribed in quick time. The other interesting observation has been the use of advertising and public relations of late by the Central Bank to deliver to execute.
What do we see if we connect the dots!