JMMB Group: Trinidad and Tobago Dollar Devaluation Risks Grow Amid Declining Reserves

The JMMB Group’s annual report indicates that while a near-term devaluation of the Trinidad and Tobago (TT) dollar is unlikely due to political considerations, risks are expected to grow as foreign exchange reserves continue to decline. Between 2015 and March 2025, reserves have decreased by 54.1%, attributed to a high import bill, low export earnings, and reduced output in the energy sector. Currently, the official exchange rate stands at approximately TT$6.78 to US$1, while black-market rates range from TT$7 to TT$8. Some economists suggest that the ‘true’ exchange rate might be as high as TT$11 to US$1, which could lead to increased import costs and inflation. Both the government and opposition are resistant to devaluation because of potential political fallout, aiming to maintain consumer purchasing power and avoid public discontent. Economists advise the public to consider converting their savings to USD or ECD, especially since USD is commonly used in various Caribbean nations, facilitating trade. However, access to foreign currency remains limited for the average citizen. The current economic situation is deemed unsustainable without reforms aimed at diversifying exports, improving productivity, and increasing foreign exchange inflows. The pressing issue is not if devaluation will occur, but rather when it will happen and how prepared Trinidad and Tobago is for this shift.