Trinidad and Tobago’s Foreign Exchange Problem Is a Regional Supply Chain Problem
The IMF said reserves fell 30 percent since 2021. The Ministry of Finance called it good news. Caribbean businesses should read the actual report.
On May 18, the IMF published its 2026 Article IV Consultation on Trinidad and Tobago. The headline number: international reserves have fallen to a projected US$4.8 billion this year, down from US$6.9 billion in 2021. Import cover has dropped from 7.5 months to 5.5.
The IMF’s recommendation was clear: greater exchange rate flexibility, and a repo rate closer to the US Federal Reserve’s current 3.5 to 3.75 percent range. T&T’s central bank is already sitting at 3.5 percent. When your rate matches the USD and carries more country risk, capital leaves. The Fund said the differential is accelerating outflows.
The Ministry of Finance issued a counter-statement the following day describing the same report as evidence of renewed confidence in T&T’s reform programme.
Both statements are about the same document.
Caribbean businesses have been feeling this for a while. Longer queues for official USD allocations. Smaller tranches. A parallel foreign exchange market charging a premium that eats directly into margins.
This matters beyond T&T’s borders. Trinidad and Tobago is CARICOM’s second-largest economy and a major regional supplier of goods, energy inputs, and financial services. What tightens there moves through the region. Founders importing goods, sourcing materials, or running operations that touch T&T’s supply chains are already absorbing the downstream pressure.
“What tightens there moves through the region.”
The IMF’s next formal review is scheduled for 2027. That is a long runway for a problem that is already showing up in business operations today.
What to watch: USD allocation availability and parallel market premiums in T&T over the next two quarters, and whether any regional suppliers begin adjusting pricing or payment terms as a result.
Stephen Stanberry
