The persistent foreign exchange (forex) shortage remains a significant threat to the survival of businesses, particularly small-and medium-sized enterprises (SMEs) across various sectors, and to the broader national economy.
This stark warning was issued by the TT Chamber in its report, Challenges in Accessing Foreign Exchange: Business Insights, released on January 22.
Based on a survey of its membership, the report delved into the factors driving the crisis and recommended urgent reforms to stabilise the forex market.
Among the most notable findings was the significant gap between forex demand and supply, despite the Central Bank injecting an estimated US$100 million per month into the banking system.
According to the survey, 58.6 per cent of businesses receive less than 25 per cent of their monthly forex requirements from commercial banks.
This shortfall, the chamber showed, has far-reaching consequences, with 62.2 per cent of businesses reporting delays in paying suppliers and 59.5 per cent experiencing declining profitability.
The strain is particularly acute for SMEs, which face systemic disadvantages in accessing the limited forex available.
Kiran Maharaj, president of the TT Chamber, stressed the importance of addressing challenges during discussions with government officials and policymakers.
“(We expressed) our gratitude to the Minister of Finance Colm Imbert and the governor of the Central Bank for their recent engagements, which provided an opportunity to share insights and explore potential solutions,” Maharaj said.
[caption id="attachment_1134325" align="alignnone" width="1024"] Kiran Maharaj, TT Chamber president. - Photo by Faith Ayoung[/caption]
She warned, however, that a failure to resolve these issues could lead to further erosion of economic stability.
The survey was done between November 13 and December 12 and highlighted the operational challenges caused by forex shortages.
The delays in accessing foreign currency disrupted supply chains but forced businesses to scale back operations.
Over 20 per cent of companies report struggles in procuring raw materials, leading to production delays and reduced product offerings.
These challenges were reportedly compounded by systemic inequities in forex distribution, with 69 per cent of businesses perceiving a lack of transparency and fairness in the allocation process.
Larger companies appear to receive preferential treatment, leaving SMEs – TT's economic backbone – unable to compete effectively.
The report found that consumption patterns have not adapted to the reduced availability of forex.
Businesses and consumers continue to demand levels of foreign currency that the system cannot sustain, exacerbating the supply-demand imbalance.
The report identified a need for behavioural changes alongside structural reforms.
"Launch targeted awareness campaigns encouraging the purchase of locally produced goods," it suggested. "Educate businesses and individuals on responsible forex usage to reduce demand pressures; and ad
