By Central Bank News
The Central Bank of Trinidad & Tobago cut its repurchase rate by 25 basis points to 2.75 percent to support economic growth at a time of falling inflation.
While there have been incipient signs of a pickup in economic activity in some non-energy sectors through mid-2012, the central bank said the international economic environment remains challenging and this is dampening consumer and business confidence.
“In order to support a sustained recovery of the domestic economy, while taking into account inflationary developments, the Central Bank has decided to reduce the ‘repo’ rate from 3.00 per cent to 2.75 per cent,” the bank said in a statement from Sept. 21.
The bank has kept the repo rate steady since July 2011, when it was cut by 25 basis points.
Inflation in August eased for the third consecutive month to an annual rate of 7.9 percent from 10.8 percent in July and 11.0 percent in June due to a sharp fall in food prices, the central bank said.
The bank also said that lending to consumers, which has been lethargic over the past few months, rose 0.8 percent in July while real estate mortgage lending remained robust at just under 10 percent and business lending grew 5.1 percent in July.
It added that the pace of deposit growth was outstripping credit expansion so liquidity in the financial system remained high in September and a Central Government bond issue at the end of this month is expected to temporarily remove some of the excess liquidity.
