Foreign Exchange Delays with Banks

The blogmaster received a report that some banks in Barbados have forced customers to submit requests for international wire transfers online and as a consequence Barbados importers are being frustrated by delays in processing. The reason for the delays is that in the case of one bank the blogmaster was able to confirm processing of the wire transfers is being done in Trinidad.

The question being asked is whether the transfers are being delayed because of an unavailability of foreign exchange by local banks or a case of the processing office in Trinidad playing ‘god’ or simply inefficient.

The developing situation comes at a time when the IMF has advised government to remove the 2% foreign exchange fee former minister of finance implemented to defend dangerously low foreign exchange reserves in 2017. The fee obviously will impact the high cost of living because Barbados is a net importer. As a first step the government should add key items to an import list that should not attract the 2% fee. The Mottley government boast of high level of international reserves which is mainly a result of borrowing.

IF there is a low level of foreign exchange held by local banks it means the Central Bank of Barbados as is the customer will sell to the banks to satisfy consumer demand? It would allay fears if those responsible address the situation.

Today’s Nation’s story:

IMF: Drop 2% fee 


THE INTERNATIONAL MONETARY FUND’s (IMF) staff wants Government to phase out the two per cent fee Barbadians have been paying for foreign currency transactions since 2017.

Then Minister of Finance Christopher Sinckler introduced the measure in his last Budget more than four years ago as the country’s international reserves plummeted below the accepted benchmark of 12 weeks of import cover.

It was intended to reduce the demand for foreign exchange and allow the foreign reserves to stabilise. With the reserves at $440 million (five to six weeks of import cover) when the Mia Amor Mottley administration was elected in May 2018, the measure was maintained and remains in place.

With Barbados’ reserves reaching $2.86 billion (42 weeks of import cover) at the end of the September, the IMF’s Barbados mission thinks Government should consider “gradually phasing” out the capitalflow measure “as the pandemic dissipates, and reserves build up”.

This was outlined in the IMF’s latest staff report recently submitted to its executive board as it approved the sixth review of Barbados’ IMF programme and the annual Article IV consultation. The assessment was that Barbados’ authorities “will consider removing the foreign exchange fee as the pandemic dissipates”.

Phased out

“The two per cent fee introduced in 2017 remains in place. This was assessed by the IMF as a capital flow measure and should be phased out as reserves build up,” said the Barbados team led by Dr Bert van Selm.

“However, the authorities plan to maintain the fee until alternative revenue sources, including through an economic and revenue recovery, can compensate for the potential losses from its discontinuation. Staff stressed that foreign exchange fees should not substitute for fiscal and other macroeconomic policies to improve fiscal position.”

In the Central Bank’s review ofBarbados’ economic performance between January and September, it reported that non-tax revenue, including the foreign exchange fee, was $64.1 million between April 1 and September 30, the first half of Government’s financial year. This was an increase over the $47.4 million earned in the same period last year.

Governor Cleviston Haynes said: “With the increase in foreign exchange transactions, revenue collected via the foreign exchange fee accounted for almost half of the enhanced uptake from non-tax revenues which expanded by $17


Reserves boosted

Barbados’ foreign reserves were boosted by $249 million in loans from multilateral lending agencies, “and an injection of $261.6 million from the IMF via its allocation of [Special Drawing Rights] to members boosted reserves over the nine-month period”.

Haynes added that “despite these inflows, the reserve increase for the nine-month period was only $204 million, a result of the steepreduction in travel credits during the first quarter, and the pick-up in import demand over the last six months that led banks to purchase foreign exchange from the Central Bank to meet customer needs”.

Additional external payments were related to debt service and other expenses on behalf of the Government, he reported.

The two per cent foreign exchange fee is charged on purchases of foreign currency and payments related to foreign currency transactions. It is applied to purchases and payments made at commercial banks and other authorised foreign exchange dealers, credit card providers and money service providers that handle outbound foreign currency transactions or loans.

This means that consumers who buy foreign cash, pay for a wire transfer or bank draft, or use their credit, debit or travel card to pay for a foreign transaction, have to pay the fee.

133 thoughts on “Foreign Exchange Delays with Banks

  1. “The Canadian economy, including banking sector, is highly protected by legislation, go check it. And here in this matter that you mention, protective, anti competitive measures.”

    but do you blame them…Canada MUST protect itself, must protect it’s cultivators and processors, and to take the thought even further, especially since so many unscrupulous leaders are DETERMINED to use ENSLAVEMENT and marijuan slave plantations to achieve exportation of product and foreign exchange income..

    yes, Canada has a well hidden HISTORY of slavery, but they worked hard to rise above that with the Harriet Tubman underground network…imagine the banks having to explain that importation and outflow is DERIVED from ENSLAVEMENT PRACTICES in Barbados or Jamaica or any of the other islands…..imagine the WORLD WIDE BLACK EYE the government will get if they enable and collude in such retrograde criminal practices…

    none of this can be allowed just for the sake of FOREIGN EXCHANGE…when lazy governments REFUSE TO USE THEIR BRAINS to UPLIFT Afrikan populations, but willing to revert to what comes easily to their CRIMINAL MINDS…so they can prance around the world stage telling even more lies and being even more decetful…

    don’t think Canadians are THAT DAFT..

  2. “This is disgraceful. Local small operators still not allowed to grow the crop, but certain people can walk in and set up large operations.”

    Again….Mia was WARNED about this….now that too has BLOWN UP ON HER…

    “Have you noticed that all of the bigshots that come in from some places end up being characters of interest..a couple even ended up up being charged by North American authorities, such as the cricket man.”

    People loves to big up these folks….but then things blow.”

    they ALWAY look FOR THE WORST TYPES OF CRIMINALS as long as they are not of Afrikan persuasion, remember Big Mike and his private jet, gushing all over Herbert’s plantation about how big his marijuana farm was going to be, how he was going to put the locals to work….idiot did not even have experience in any of that, just a mere soil technician, and allegedly a well known CON MAN….but the right color persuasion FOR THE NATURALLY CORRUPT…

    fasten ya seatbelt more to come..

  3. Crusoe…even worse…these governments LURED the Canadian and other investors, some of whom PUT MILLIIONS OUT THERE in investment…one guy said he put out 10 MILLION DOLLARES…

    who will reimburse these people, surely not Barbados’ taxpayers….but someone is LIABLE…hope it turns into PERSONAL LIABILITY/TORT against individual government ministers for their recklessness…,..since the people had nothing to do with it and those like myself were SHOUTING OUT against it from DAY 1 and got cussed soundly in BU for it……when word reached us that some of them sent their family members abroad to lure these white investors very early in the game…they certainly can’t pick up IMF loan money to settle any claims made against them…

    ..can’t make none of this shit up that’s playing out in real time…🤣🤣🤣🤣🤣..

  4. “Modesty prevents me from detailing my role in pushing the Barbados Labour Party’s offshore policy and getting it in the 1976 manifesto.”

    “As special advisor to the Prime Minister at the OECD meeting at Sherbourne, I can speak directly of the powerful fight put up by the late Owen Arthur in 2001…”

    “In early 1976, I volunteered to enter Cave Hill as a full-time law lecturer to pioneer the teaching of tax law and company law – a deliberate decision.
    I thought we had to constantly produce our home-grown experts in these areas. As a law tutor I have pointed the footsteps of many young lawyers in that direction.”

    “Antiquated institutional rules cut short that tenure once I became elected,…” I think that means he got ‘fired’.

    Surprise this guy finds time to write.. so busy loving the guy the mirror and trying to screw himself.

    😀Looks as if Theo had a bad Xmas😀

  5. Thought he was a constitutional law expert. Would love to see him comment on the Garth Patterson article.

    They tell you how great they were in the past ..

  6. “Surprise this guy finds time to write.. so busy loving the guy the mirror and trying to screw himself.”

    sorry Theo..but that is all ya are going to get, even about the retroactive SLAVE CONSTITUTION brought back to life……even about the marijuana SLAVE PLANTATION COCKUP..

  7. Notice that they would prefer to IMPLODE rather than admit that what they are doing to the people is FUNDAMENTALLY WRONG AND CRIMINAL…they have convinced themselves that being part of the diplomatic community temporarily makes them invincible and untouchable, while totally not knowing or CARING that RA IS IN CONTROL…and we ARE THE DESCENDANTS…

  8. Dec 26 4.44am
    I have read this article 10 times in the last 2hrs and remain confused. The holiday rums? Hoping the head might clear by tomorrow 😃

  9. David 4.29
    The answer is yes. The reason is Mary Jane while federally legal in Canada is not so in the USA. The Cdn banks have an increasing footprint in the US (just before Xmas BoMontreal announced the 16B buyout of Paribas in US) and get blowback from the US authorities. This is typical big country politics as they try to enforce their laws on the rest of the world. Exactly how banking dodged more stringent oversight in the NAFTA negotiations remains a mystery.

  10. I was amused.
    I recall in the blogmaster’s occasional exchanges on social media with Dr.Robinson, then Chair of the NIS, he noted one of the challenges in producing financial statements resulted from the change from cash to accrual accounting.
    Now we have the MoF using one method, cash for the primary balance, but accrual for debt. And the ijit IMF speaks to improving transparency and accountability. I observe this as perpetual obfuscation. We already know why there will be issues in reconciling numbers…lol.

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