Barbadians who are getting confused and “worked up” about the possibility of Barbados’ dollar being devalued are causing themselves unnecessary worry.
The island is in no immediate danger of suffering such an unwanted outcome, said seasoned economist Dr Clyde Mascoll, and he advised the country to “stay away” from such talk.
Mascoll, a former Minister of State in the Ministry of Finance and a current Opposition Barbados Labour Party spokesman on economic matters, echoed recent comments of University of the West Indies economics professor Michael Howard.
According to Mascoll, the main reason fears of devaluation were unfounded was because Barbados had adequate foreign reserves.
He was speaking Thursday night during First Citizens Investment Services market outlook seminar at Frank Collymore Hall.
Mascoll said while in the current climate some people tended to “get very worked up” that a currency devaluation in Barbados was imminent, “devaluation is a good ways off in Barbados”.
“If we can get the fundamentals right and do other things and get the policy prescription right then we should not even be using the word in Barbados. In spite of the fact that we were having a fiscal crisis problem, and we continue to have one, in spite of the fact that our economy has not been growing for the last six years, in spite of the fact that unemployment has been rising, the one economic indicator in Barbados that was positive for the last six years was the adequacy of the foreign reserves at the Central Bank,” he said.
“Go back and read all the reports; that was never a problem and therefore when it was said that that was the ideal time to stimulate the economy you then heard . . . if you do that it was going to have implications for the reserves.
“But believe you me, there has never been a better five-year period in terms of reserves in Barbados, even during our good economic years then what was experienced between 2009 and 2013. The reason why I can say these things is that I worked as a little boy, 19 years old, collecting the data. I was a mechanic, I got my hands soiled; we are not in any danger of that [devaluation], so please stay away from it, it’s not the issue in Barbados,” he said. (SC)