Governor of the Central Bank of Barbados, Cleviston Haynes.
HIT hard by COVID-19, this country’s economy is expected to shrink by double digits, according to Governor of the Central Bank of Barbados, Cleviston Haynes.
Speaking on Thursday night’s 2020 Caribbean Economic Forum entitled ‘COVID and Economic Policy: Protecting Jobs, Businesses and the Economy’, he said projected growth for the year had been halted by the pandemic.
“Over the last two years, we worked very diligently to restore the situation to the point where our reserves had been built to comfortable levels. We had some debt restructuring which has brought our debt levels down and the only thing we really wanted to do now was to get the economy to grow.
“We had anticipated for 2020 that we would get some modest growth backed by investments from investors and COVID came and threw all of our plans askew, so rather than getting modest economic growth, we now expect to have a double-digit fall in the output for 2020. This has led to significant
loss of jobs, loss of revenue for Government. The one thing that has stood out is that our reserves are now steady, not only have we been able to get resources from the IMF, but we have not really had to sell foreign exchange to shore up our reserves in the past three months and that I think is a positive sign in terms of the development that we have,” he continued.
Haynes said one major redeeming factor was that Government’s foreign reserves were close to $2 billion, which was shoring up the island’s handling of the current situation.
Speaking on measures implemented by his facility, Haynes stated that in addition to encouraging commercial banks to provide moratoria to the private sector for their loans, it had lowered discount rates, reduced securities ratios for banks and supported social safety nets for the private sector.
Regarding the possible weakening of the US dollar to which the Barbados dollar is pegged at a ratio of 2:1, Haynes expressed his belief that while the US financial market was under some strain, there will eventually be an upturn.
“I think what is critical at this point in time is really related to our trade flows. Yes, the US currency may suffer periods of depreciation, but I think at the end of the day what one will notice is that the US financial market is really a strong financial market and that while we are going through a little bumpy period now in the US because of the trade tensions, I think those will be resolved over time and the US will resume its general governance within the financial landscape,” he predicted.