It has recently come under harsh criticism for its heavy financing of Government.
But this has not stopped the Central Bank of Barbados, under its new leadership, from coming to the rescue of the Freundel Stuart administration.
In leading off debate on the 2017 Appropriations Bill in Parliament Monday morning, Minister of Finance Chris Sinckler downplayed the recent concern raised by ratings agency Moody’s that Government was at high risk of defaulting on its international loan obligations.
However, he sought to assure that the island’s foreign reserves, which fell to a low of 10.3 weeks at the end of December 2016, should soon be on the road to recovery.
In this regard, Sinckler said he had advised the Central Bank – which is now under the command of Acting Governor Cleviston Haynes who replaced the sacked Dr DeLisle Worrell at the height of disagreement with Government on the need for tighter monetary controls – to source “a backstop” loan facility, which would be used only if necessary, to shore up the reserves.
“We will make that judgement over the next few months,” Sinckler said.
“They have made an offer of up to US$100 million on a loan. We have not taken it, we have not decided to do that as yet, but we will monitor the reserves situation over the course of the next months and, if necessary, we will engage that particular facility as given. But the staff, from this week, will be working on the specific details of that and of course it has to come to the House of Assembly, so we will inform the House and country as well to that,” the Minister of Finance added.
Sinckler, whose Government had previously been reluctant to go the route of privatization, also revealed that another prized state entity could soon be up for sale.
“Cabinet will shortly be asked to contemplate the sign-off of another viable and highly saleable commercial asset for which the Government has already received no less than 12 very, very serious and lucrative, commendable offers,” he said, adding that “if that is approved by the Cabinet it will earn in excess of US$100 million during the course of this calendar year”.
He said provision for the sale was made in the Estimates, and “we will be announcing very shortly what that particular asset is”.
As for the pending sale of the Barbados National Terminal Company Ltd for US$100 million, which is awaiting Fair Trading Commission approval, Sinckler said: “There seems to be an effort or an attempt . . . to scuttle and block that particular transaction”.
However, “we will wait and see how it goes,” he added.
In the meantime, the Minister of Finance, who has been under immense pressure in recent times for his handling of the economy, reported that a number of the expected inflows were already coming in.
Chief among them, he said, were a US$25 million bridging loan from First Citizens Bank for the Development Bank of Latin America (CAF)-sponsored upgrade to the Barbados Revenue Authority and Customs and a financial disbursement for the Sam Lord’s Castle hotel project.
Sinckler also informed Parliament that the Caribbean Development Bank’s $14 million loan to the Student Revolving Loan Fund should be deposited shortly.
He also said the island’s foreign exchange reserves were in for a further boost as a result of recent changes to the tax concession rules for investors and developers seeking waivers for projects here.
“We believe with those situations in hand we should be able to bring our reserve levels back up to more comfortable levels even as we work to unlock new earned foreign exchange in Barbados through the main sectors of tourism, international business and of course now rum exports. So we believe that that should bring us to where we need to be in the shortest possible time,” he added