Annual Report on Exchange Arrangements and Exchange Restrictions 2005
Chapter

TRINIDAD AND TOBAGO

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
September 2005
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(Position as of December 31, 2004)

Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: December 13, 1993.
Exchange Arrangement
CurrencyThe currency of Trinidad and Tobago is the Trinidad and Tobago dollar.
Exchange rate structureUnitary.
Classification
Conventional pegged arrangementSince the exchange rate of Trinidad and Tobago dollar remains very stable vis-à-vis the U.S. dollar, the exchange rate regime has been reclassified, effective January 1, 2004, to the category conventional pegged arrangement from the category managed floating with no predetermined path for the exchange rate. The Central Bank of Trinidad and Tobago (CBTT) allows the exchange rate to move within a narrow range and maintains an informal ceiling on the exchange rate of TT$6.30 per US$1.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketBanks are allowed to conduct foreign exchange transactions, both spot and forward, with the public without limitation.
Arrangements for Payments and Receipts
Prescription of currency requirementsSettlements may be made in Canadian dollars, euros, Japanese yen, Myanmar kyats, Norwegian kroner, Swedish kronor, Swiss francs, pounds sterling, and U.S. dollars.
Use of foreign exchange among residentsOnly ADs are allowed to buy, sell, borrow, or lend foreign currency to any person other than another AD without the permission of the CBTT.
Payments arrangements
Regional arrangementsTrinidad and Tobago is a member of the CARICOM.
Clearing agreementsTrinidad and Tobago is the agent for the inoperative Caribbean Multilateral Clearing Facility.
Administration of controlAuthority to administer exchange control is vested in the CBTT acting under the authority of the MOF.
International security restrictionsNo.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)
Controls on domestic ownership and/or tradeResidents are permitted to purchase, hold, or sell gold coins for numismatic purposes. Unless specifically permitted by the MOF, one party to transactions in gold between residents must be an authorized bank.
Controls on external tradeExports of gold are controlled by the Ministry of Trade and Industry (MTI) and are subject to specific export licenses, which are normally issued only to monetary authorities.
Controls on exports and imports of banknotes
On exports
Domestic currencyFor amounts exceeding TT$20,000, a customs declaration is required.
Foreign currencyFor amounts exceeding the equivalent of US$5,000, a customs declaration is required.
On imports
Domestic currencyFor amounts exceeding TT$20,000, a customs declaration is required.
Foreign currencyFor amounts exceeding the equivalent of US$5,000, a customs declaration is required.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyYes.
Held abroadYes.
Accounts in domestic currency held abroadn.r.
Accounts in domestic currency convertible into foreign currencyn.r.
Nonresident Accounts
Foreign exchange accounts permittedYes.
Domestic currency accountsYes.
Convertible into foreign currencyYes.
Blocked accountsNo.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for importsNo.
Import licenses and other nontariff measuresDuty-free licenses are granted to local concessionary manufacturers for imports of certain inputs for manufacturing.
Negative listImports of firearms, ammunition, and narcotics are tightly controlled.
Open general licensesAll goods, unless exempted for reasons of health or security, may be imported under OGL arrangements.
Other nontariff measuresAll imports of food and drugs must satisfy prescribed standards. Imports of meat, live animals, plants, and mining materials are subject to specific regulations.
Import taxes and/or tariffsIn accordance with the fourth phase of the CARICOM CET, the customs duty rates on most goods range from 5% to 20%. The rate on agricultural produce is 40%. The duty rates on new motor vehicles range from 25% to 45%. All goods originating from CARICOM countries are exempt from duties, as are imports of some foodstuffs, fertilizers, and raw materials. Local enterprises producing import substitutes or export goods may be granted exemptions from customs duties by the MTI and the Tourism Industrial Development Company, Ltd.
State import monopolyImports of animal feed, flour, rice, petroleum, and edible oils are traded principally by state companies.
Exports and Export Proceeds
Repatriation requirementsIn practice, the foreign-owned petroleum company operating in Trinidad and Tobago repatriates all foreign exchange after providing for the equivalent of its local currency needs.
Financing requirementsNo.
Documentation requirementsNo.
Export licensesIndividual licenses are required for some foodstuffs, firearms and explosives, animals, gold, petroleum and petroleum products, and certain products not produced locally. Export licenses for all other commodities are granted under OGLs. General licenses may also be issued at the discretion of the MTI.
Without quotasMost export licenses are granted without quotas.
With quotasQuotas are sometimes established for the export of some products, such as fish, on the basis of local supply.
Export taxesNo.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersNo.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsNo.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital transactionsYes.
Controls on capital and money market instrumentsCross-border trading of shares of companies listed on the respective stock exchanges is permitted among the residents of Barbados, Jamaica, and Trinidad and Tobago; residents and companies of the first two countries are designated as residents of Trinidad and Tobago for exchange control purposes in cross-border trading.
On capital market and securities
Shares or other securities of a participating natureHolding shares in local companies is subject to compliance with the provisions of the Financial Institutions Act.
Controls on derivatives and other instrumentsNo.
Controls on credit operationsNo.
Controls on direct investment
Inward direct investmentHolding shares in local companies is subject to compliance with the provisions of the Foreign Investment Act.
Controls on liquidation of direct investmentNo.
Controls on real estate transactions
Purchase locally by nonresidentsHolding interest in real estate is subject to compliance with the provisions of the Foreign Investment Act.
Controls on personal capital transactionsNo.
Provisions specific to commercial banks and other credit institutions
Differential treatment of deposit accounts in foreign exchangeYes.
Reserve requirementsEffective September 4, 2004, the reserve requirement applicable to domestic currency deposits in banks is 11% (previously, 14%). A supplemental reserve requirement of 5% applies, which can be held in treasury securities. A reserve requirement of 9% applies to nonbank institutions.
Liquid asset requirementsA liquid asset ratio of 20% on foreign currency deposits is required.
Open foreign exchange position limitsLicensed institutions are required to maintain a minimum capital position equal to 10% of their net currency exposure.
On resident assets and liabilitiesYes.
On nonresident assets and liabilitiesYes.
Provisions specific to institutional investors
Limits (max.) on investment portfolio held abroadYes.
Limits (min.) on investment portfolio held locallyInsurance companies are required to hold at least 80% of their investment assets locally.
Other controls imposed by securities lawsThe Insurance Act imposes other controls.
Changes During 2004
Exchange arrangementJanuary 1. The exchange rate regime was reclassified to the category conventional pegged arrangement from the category managed floating with no predetermined path for the exchange rate.
Capital transactions
Provisions specific to commercial banks and other credit institutionsSeptember 4. The reserve requirement applicable to domestic currency deposits was reduced to 11% from 14%.

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