Governor DeLisle Worrell Warns Foreign Reserves Continue to Fall

The Barbados private sector agency has raised the alarm that their members have had to wait for foreign exchange to be released from commercial banks to honour purchase requests. This is not good news for Barbadians who have had to tighten their belts for eight long years. Have we not been boasting of record arrivals for the last two years? What is happening!

The Governor of the Central Bank warned Barbadians in a document posted to the Central Bank website last week that the country has failed to manage the balance in foreign exchange inflows and outflows since 2013. Based on the Governor’s concern it is safe to assume that our international reserves have fallen from 900.3 million or 14 weeks of imports at the end of the 3rd quarter -to what?

With tourism booming by all account YET foreign reserves falling the solution is to increase tourist arrivals, foreign direct investment AND decrease demand for imports. If the reserves continue to fall we will not be able to defend our peg to the US dollar. The price of oil which has started to increase will not help our cause. Wait a minute -why do we pontificate about tourist arrivals? Should we not heed the advice of the official from Singapore who indicated at a conference in Barbados a couple years ago we must measure the success of tourism by revenue receipts and NOT number of tourists.

With sinking foreign reserves so too will investor confidence on the local and international markets. Several huge investment projects like Sam Lord’s Hotel, Hyatt Hotel, Beaches Hotel, Four Seasons, Marina and others have not started as promised by the government. Whether we agree if the projects should be implemented or not, the inability of the government to mobilize them has affected the plan to inject activity in the economy.

The obvious question is -what next? With a year to go before the next general election one thing we know for sure -the Democratic Labour Party will not have a strong economy to support a campaign message to win votes. BU’s prediction is that this will be one of the ‘nastiness’ general elections since Independence.


  • Want to bet that CariCRIS will be dismissed as a regional fly weight entity?


  • Since 2008 I have been calling for a de-pegging of the Bajan dollar and fixing it against a basket of currencies and commodities. I was poopawed. Now it is getting serious currency. H|ad that happened years ago the economy would have been in a much better position.
    I blame Sinckler and Worrell, tweedledee and tweedledum.


  • Peter Wickham , Mia Mottley’s political advisor told her “do not offer any SPECIFIC solutions” to any issues in Barbados. Notice the word SPECIFIC.
    Wickham’s memo includes the need to say cut spending but never say where so as to avoid any of the political fall out because the only place left to cut is WAGES and SALARIES or go and beg your creditors for an ease with the repayments which they most likely will not give and which would cause further panic in your financial system. So Mottley was advised to use buzz phrases like “spending can be drastically reduced with a little creativity”,lol, etc.

    Hence the BLP smokes and mirrors will continue as they try to push a narrative that they have some magicians who will find miraculous solutions to everything in Barbados with a bunch of recycled MPs like Trevor Prescod and Glyne “wuk fa wuk” Clarke and a few others that do not have a damn clue . Just give the BLP power and manna will start to fall from heaven, millions of taxpayers dollars will appear, tourists who were sitting in Europe waiting for a BLP administration will decide to take a vacation and spend like crazy.

    No wonder Peter told her not to be specific, just throw out the bait and let the fish bite. Bajans are more intelligent than Peter Wickham and his Mottley crew believe.


  • It doesn’t matter who won’t say where to cut we will have to find where just not given the state of public finances.


  • Hal Austin January 12, 2017 at 3:21 AM #

    “Since 2008 I have been calling for a de-pegging of the Bajan dollar and fixing it against a basket of currencies and commodities.”

    @ Hal Austin

    Once again I must admit that there is merit in you above comment.

    I prefer to discuss these issues by using models to further explain the theory, but I cannot do so in this forum.

    As I mentioned in a previous contribution, Barbados has to pursue economic policies compatible with the economic model under which the island operates. And this includes monetary (exchange rate) policies that afford us the capability of maintaining the exchange rate peg.

    You are aware that, and against the background of rapidly depleting foreign exchange reserves, Barbados has been running persistent balance of payments and fiscal deficits while pursuing exchange rate/monetary policies to maintain the fixed exchange rate.

    Under the prevailing economic environment, continuance of these policies will ultimately lead to a currency crisis, whereby investors, after losing confidence in the country’s ability to meet its debt and other international obligations, will see their domestic assets in favour of foreign assets, (i.e. CAPITAL FLIGHT), which may have 3 results:

    1) A devaluation of the dollar
    2) Moving to a floating exchange rate
    3) Borrowing from organisations such as the IMF or entering an IMF program.

    Under a fixed exchange rate system, monetary policy has proven to be ineffective in influencing economic growth. While, in a floating exchange rate system, monetary policy could bring about a short-term decrease or increase in GDP, because it affords the Central Bank the ability to adjust policy to affect the economy’s macroeconomic conditions.

    If there is sluggish growth or a contraction of the economy, under a floating exchange rate system, CBB could increase the money supply in an attempt to spur GDP expansion.

    Barbados has been experiencing sluggish economic growth for the past 10 years. Under a fixed exchange rate system, the CBB cannot effectively increase economic growth by increasing the money supply. We have been increasing the money supply to finance domestic spending and the deficit. Hence, we may soon lose monetary autonomy.


  • NEW YORK – Moody’s Corp has agreed to pay nearly $864 million to settle with U.S. federal and state authorities over its ratings of risky mortgage securities in the run-up to the 2008 financial crisis, the U.S. Department of Justice said on Friday. … The credit rating firm reached the deal with the Justice Department, 21 states and the District of Columbia, the Department said in a statement. The agreement comes two years after S&P Global’s Standard & Poor’s entered into a $1.375 billion accord with the Justice Department, 19 states and the District of Columbia over similar claims. Standard and Poor’s is the world’s largest ratings firm, followed by Moody’s – See more at:

    Are these the Moody’s and S&P’s that persist in harassing little insignificant Barbados? The US government not only found Moody’s and S&P to be crooks and corrupt. The US government also deemed them cheats and fined them billions for misleading people. So much for the bandwagoners who jump and wave when Moody’s and S&P come to town to unfair little Bim.
    Fine the heck out of them USA………… USA !USA!USA!


  • Commentator January 14, 2017 at 4:02 PM #

    So Moody and S&P are crooks……..who cares…….the world of business listens to them…..that is the bottom line… try and organise your affairs in such a manner that you do not need the business world……simple….can you do it?


  • What about CariCriS?


  • Vincent Haynes January 14, 2017 at 5:04 PM #
    Commentator January 14, 2017 at 4:02 PM #
    So Moody and S&P are crooks……..who cares…….’

    Pure hypocrisy when the Canadian solar investors brought projects your kind protested that they were prosecuted in Canada and therefore not welcome. A similar fate awaited a number of foreign investors who fled and took their FDI leaving Barbados without a cent in sorely needed foreign exchange, The situation is the United States the world most powerful government have convicted Moody’s and S&P as criminals. They are therefore unqualified to judge little B’dos. There is the equivalency. Knock off your childish hypocrisy.


  • Commentator aka waiting


  • Commentator January 14, 2017 at 7:28 PM #

    When will you all learn that the world is not fair,those “crooks” control the decisions made by the lenders,so continue crying as no one is listening……..better to get up and start trying to solve these problems in the next 18 months if you know whats good for you.


  • Violet C Beckles CUP

    Once again SB, learn to Listen to CUP
    listen to the news cast
    then go to page 8 and 9
    listen to what MOF Sinkman say about IDB and land,
    When you read where the 60 million Dollars was to go ,
    Write down the names of the areas and what even plantation names you can see,
    Take notes this is real Life not a computer chart and no History.
    Living People , Humans , Who Live and DIE and need to Live Well in the middle of Life,
    Learn Barbados true History hidden and removed by crooks If you want to help the same people that you want Vote from , We did , We know , Catch up ,
    for right now we see you here to split the CUP Votes and to allow the DBLP or the BDLP to get back in , Know who your enemies are ,We have to clean out the Gully , Unless you are the back up of the DBLP Fraud government,
    We have all of what they said in this news cast that made it to much for the MOF,
    We I sat with him face to face in the UDC, He said, “We Do not pay twice” We told him he paid the wrong people,at that time it was over 90 Million paid out for fraud lawyers and fake land owners,

    He even used the word CLEAR TITLE , a term the lawyers of Barbados run from ,


  • Hi Hal Austin You stated
    “Since 2008 I have been calling for a de-pegging of the Bajan dollar and fixing it against a basket of currencies and commodities.”


  • imagine that not even an entire year has gone yet since MAM brought a no confidence motion againt the CBG and look what unfolding now. What these bunch of Political mishaps that call themselves the Deceitful Lied party will blame this on. The self inflicted blows they gave our economy. How much of the people money they got in offshore bank accounts. Lord help this small Island before it SINK.


  • whats the basket of currencys…the iranian rial the rupiah the dong the kwacha lol


  • Well Well & Consequences Observing Blogger

    Lawson….. look, jokes cant


  • Well Well & Consequences Observing Blogger

    Hal mis-spoke…lol

    It totally makes no sense.


  • Well Well & Consequences Observing Blogger

    I totally agree with EU to restrict travel for Americans, they should not be the only people allowed to travel so freely when millions of their citizens are among the most violent.

    “The European Parliament has voted to end visa-free travel for Americans within the EU.

    It comes after the US failed to agree visa-free travel for citizens of five EU countries – Bulgaria, Croatia, Cyprus, Poland and Romania – as part of a reciprocity agreement. US citizens can normally travel to all countries in the bloc without a visa.”

    Look Lawson…exactly what we wanted..


  • Hindsight,

    Yes. Since the crisis In my Notes From a Native Son.


  • Lawson,

    Certainly not the Canadian dollar. The trouble with this forum is that one has to repeat the same thing for every new voice. I can’t be bothered. Get hold of Notes….


  • Artaxeerxes,

    I have also called for the government to abandon the popular consensus of foreign reserves and opt instead to play the currency futures market to meet the requirements of any shocks – what insurance companies call a once in a 200 year event.
    Even David likes talking about foreign reserves. I think the mantra of foreign reserves have got hold because it has been taught at Cave Hill for decades by people like Frank Alleyne, regardless of the changes in global finance since the 1980s.


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