Former Prime Minister, Owen Arthur, States That Devaluation of Barbados Dollar Looming

The Barbados dollar, the third highest in the English-speaking Caribbean, could soon be devalued, according to former prime minister,  Owen Arthur, who wants government to tell the people what the country faces.  Arthur made the comments Sunday night against a backdrop of Barbados last week suffering a downgrade from Ba3 to B3 by international financial rating agency Moody’s, and amidst government’s cost-cutting efforts to tame a runaway deficit.

“Our fiscal situation at its worst should have been five percent of GDP,” Arthur said while adding, “But the government and Finance Minister, Sinckler, reported to parliament that it was 11, so it is twice as bad as its worst case scenario.  Furthermore, he stated,  “Moody’s is telling us that it had to downgrade Barbados by three notches because the Central Bank has been printing money and it is undermining and threatening the stability of the Barbados dollar.”

The Barbados dollar at a fixed rate of US$0.50 cents is number three in the region behind the Cayman Islands and Bahamas dollars in that order.  Arthur’s comments came one day after Prime Minister Freundel Stuart had likened the Moody’s report to “garbage.”  Arthur urged the prime minister to seek advice before speaking on such matters to avoid bringing his office into disrepute.

Following an IMF Article IV Consultation report in February, a team from the Monetary Fund returned to the island last week as part of a monitoring program of government’s implementation of its recommendations on restructuring and reducing its financial obligations.  Arthur then concluded, “This … is too big a matter to be handled by a group of people from the IMF coming here and giving us technical assistance. This requires a conversation between government and the governed, and we need to have it now.”

Source: Caribbean360