Minister of Finance Chris Sinckler today assured that Government is meeting its foreign debt repayments.
In fact, he told journalists gathered at Government headquarters where he has been meeting all week with the private sector that a payment of more than $40 million was recently made to Credit Suisse.
And with more payments due in the coming months, the Minister of Finance said he was not worried about the island defaulting at this stage.
“I am not worried about it at all. Actually our foreign debt profile is pretty good. It is very flat and we have designed it that way,” he said.
“We now pay less than ten per cent on foreign earnings to service debt and that is how it should be. I think it was seven per cent when last I checked and that is good. We try to keep the profile as flat as possible,” he added.
However, with Government papers due to mature in 2021 and 2022, and approximately $400 million to become payable, Sinckler said “we need to make corrective action now so that we can return to market and be able to source resources if we determine that we either want to pay those off or roll them over for a longer period”.
With that said, the Minister of Finance was confident that “we will be able to meet those commitments” until 2021.
In defence of the tax measures announced in his May 30 Budget, Sinckler said it was critical that the island strengthen its foreign reserves, which fell below $700 million, or below the recommended 12 weeks of import cover last December.
He also stressed the need for Government to “contain anything that may contribute to an outflow from the reserves of the country.
“We want to make sure we keep the Barbados dollar stable. Secondly, we have to finance the operations of Government. We have been running a fiscal deficit for a number of years now and of course these have cumulative effects,” he said.