Devaluation looks a real concern
CENTRAL Bank governor John Rolle has made a few dubious statements recently in response to former Chamber of Commerce chairman Robert Myers’ comments about the imminent likelihood of devaluation of the Bahamian dollar.
There is some dialogue ongoing about the global benchmark of more than one billion dollars of foreign currency reserves being the acceptable norm, with Rolle stating that foreign currency reserves at the Central Bank of The Bahamas are well above benchmark. But how much of the reserves are held in which currencies? Further doubt is cast on the definition of a ‘medium term’ threat of devaluation, as in most businesses short term equates to anything within one year and medium term is just a few years more.
But Rolle also raises a point about the Central Bank’s ability to regulate demand for foreign currencies, that being “another layer of protection” against devaluation.
But how can the Central Bank truly limit demand for foreign currencies, and let’s be frank, those are mainly US dollars? Bahamians demand foreign currencies to buy foreign goods supplied either direct from abroad or by local businesses, again, namely US goods and US currency. The Bank ultimately can’t limit the desire for US dollars; it can only limit access to US dollars, so that Bahamians then circumvent the Central Bank to get the US currency they desire. Is that another subliminal message by Rolle, that soon there will be firmer restrictions on Bahamians’ access to US dollars?
The word on the street, even in the poorest parts of Nassau and where you think the people are not well-educated, is that people are advising each other to hold tightly to US currency.
The whole point Myers was making was that the people’s demand would shift, increase, either pulling on existing US dollars in local banks or resulting in them seeking to transact offshore in US dollars.
As it stands, no one but Bahamians have any reason to want to hold Bahamian dollars. If they can see, within their smaller circles, that limited business opportunity and productivity which gives value to the local currency is greatly diminished, they’re not interested in holding local currency.
If US-based businesses in the Bahamas doing business mainly in the United States, repatriating US funds to their US-based headquarters or principals, that draws down the US currency reserves at the Central Bank.
Under current economic conditions, I believe Myers’ suggestion is that it is not unlikely for such businesses to pull out of the Bahamas, initiating a draw down on US dollars from their local banks and ultimately the Central Bank which supplies them.
Rolle himself says “a predicate to any pressure on the currency is for the foreign reserves to be threatened with depletion”.
When Kerzner International pulled out of the Bahamas, and cashed out in US dollars, I do recall a significant draw down on US reserves held in the Central Bank of The Bahamas.
Imagine that times four, five, or more times, by multiple businesses. Or, can we still not see that as a possibility?
Send email to nburrows@tribunem...
By NICOLE BURROWS
I thought Loretta Butler-Turner stood a chance. Scratch that, with my apologies. Not if You Know Who is back on the scene.
Do you think it’s just coincidence that he keeps rearing his head/showing his face lately, at seemingly meaningless events? Duane Sands’ swearing in at the Senate; the naming of a cheesy building that houses the main offices of the Water and Sewerage Corporation (isn’t that already a name?); and now a statement released on Sunday night ... ie, very early in the week of a rushed Free National Movement convention.
Well, what if it’s all a prelude? Get ready for it. This statement by former Prime Minister Hubert Ingraham is not a statement, it’s a speech posing as a statement.
With Ingraham’s return, there will be no Hubert Minnis, not as leader, maybe deputy. There’ll be no Loretta Butler-Turner as leader, though it does seem as though Sands is Ingraham’s favourite boy; maybe we could see him as deputy leader, aiming to satisfy those urging the organisation to embrace young leadership. K Peter Turnquest may be chairman (because Sidney Collie is practically an animation) or deputy, but for certain no FNM wants to see Minnis fall so far from the top that his current deputy becomes his leader.
Should Ingraham return as party leader, it would be an opportunity for Minnis to take a more graceful bow and say ‘I have held the fort as long as I could, as best I could, and now it’s time for the other Hubert to take back the reins’.
And then it would be left to the voting public. Diehard FNMs may want Ingraham back - but does the general voting public?
Do young people want to move backwards in time, some 19 years to be exact, per Ingraham’s latest speech … I mean statement?
I will hazard a guess that no young Bahamian who will vote in the 2017 general election would want to see Christie, Ingraham, Davis or Minnis on the ballot in position of leader and, therefore, ultimately Prime Minister.
Ingraham is already campaigning. He plays coy with the reporters, but he knows how to work them … he gives them only as much as he wants to and then inserts a few parables to ponder.
“You’re a very bright girl”, he said, rather disrespectfully to a young reporter covering the naming ceremony (again, who is ever going to call it the E George Moss building?). “One of these days,” Ingraham said to a second young, female reporter, “I’m gonna give you an interview.”
And as you watch this exchange between Ingraham and the fledgling journalists, you can’t help but wonder why all these old heads are standing around together trying to look like they’re about the business … Miller, who keeps tapping Ingraham on the shoulder for his attention, like a rejected kid none of the other boys want to play with, and Davis, Ingraham and Christie.
Apparently, the group of young reporters asked Ingraham what he thought would help the official opposition win the general election. His response in part was “the votes of people like you”, pointing to the first young reporter, who looked completely baffled as to what that meant.
It means one of three things: young people, women, and/or the media. And with that said, Ingraham knows who to court if he returns.
In truth, what it will take for the opposition to win the 2017 general election is the same thing it would take for any organisation to win the 2017 general election – they are all scraping the barrel bottom and they all have a long way to climb.
And then there’s Perry Christie’s little cryptic dialogue at the same pointless, except-for-it-being-a-photo-opp Water and Sewerage Corporation ceremony ... a ‘welcome back, buddy!’ message for Ingraham. Back together again … to face the world, as the song goes. You could almost see them pointing index and middle fingers at eyes and at one another. You know the motion … “We gat dis”.
Maybe they have both lost their marbles. I’m not sure how much more lowness Bahamians could throw in their direction to drive home the point that they both need to be - and stay - in retirement. If they think enlightened, progressive Bahamians want to watch them do this dance again together they are dangerously out of sync with the thinking of the only people who want and could probably help their country to move forward with a hope in hell.
In Ingraham’s speech, he outlines how he sought to unify the FNM while he was party leader, to suggest to ‘FNM supporters ... and non-aligned voters’ that he can do it again … that he, in fact, is the one true uniting force for the FNM. He’s the glue, like Christie is to the Progressive Liberal Party.
The fun thing about being a writer is you always know the different ways another writer will end her or his story. My friends absolutely abhor watching movies with me. Very rarely can a plot or its outcome surprise me. And the plot of Ingraham’s return to the forefront of the FNM and mainstream politics would only be another one of those unsurprising endings.
Returning to frontline FNM leadership and returning to politics is the worst thing Hubert Ingraham could do for his country. It would be for the FNM party if he did it, not for the people.
When the same enlightened, visionaries among Bahamians sound the alarm, on news of ancient mammals returning to modern landscapes and such, it’s not because they want to see their country fail … it’s actually the battle cry, to which, if Bahamians had ears and eyes to listen and see, they would respond with urgency.
Hubert Ingraham has done his time for the Bahamas. Perry Christie has done his time for the Bahamas. They both need to make way for new leadership, or both he and Christie will obliterate any measure of goodness they ever fostered during their respective tenures as Prime Minister. But, maybe, they don’t care about this.
You’ll know for sure soon enough.
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@tribunemedia.net
Comments
Well_mudda_take_sic 7 years, 9 months ago
The Bahamian people have been played as fools for far too long by Ingraham and Christie alike. Both have driven our country to the brink as a result of their corruption, greed and incompetence, all the while feathering their own nests and the nests of their family members and elitist cronies.
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