No shortcuts on exchange control issue, warns Central Bank gov.

No shortcuts on exchange control issue, warns Central Bank gov.
Central Bank Governor John Rolle.

NASSAU, BAHAMAS –  Central Bank Governor John Rolle yesterday cautioned that there is ‘no shortcut’ or ‘easy solutions’ in terms of dealing with exchange control issues.

Rolle stressed the need for stability as he addressed a Monetary Policy Committee press briefing at the Central Bank.

He was asked if any further relaxation of exchange controls is to be expected.

“We are always looking at ways we can improve the administrative process,” Rolle said.

“There are a lot of of ways we can make improvements  that do not immediately impact the rules of regulation. We are very diligent in looking at ways on how we can further streamline the administrative process.”

The Central Bank has taken some steps to relax exchange controls.

Most notably, since February 2018, Bahamian-owned businesses have been allowed to maintain operating deposit accounts, with up to $100,000 in foreign currency, at domestic commercial banks.

While acknowledging the growing public discourse towards ending exchange controls, Rolle said: “I think what is important in the public conversation on exchange controls is understanding that we always want a system where we keep the financial sector stable and we also keep our foreign exchange market sable.

“A part of the discussion around exchange control is you get rid of them you just let your currency float.

He continued: That is an extreme outcome and there is nothing wrong with that view provided that we understand that there is still something you always must be doing in terms of how you mange your economy, your public finances and financial sector so people have confidence in the foreign exchange markets and those markets can be stable.

“What we have said from the Central Bank’s point of view is until you have built up systems that allow you to maintain the stability in those markets using policies and tools other than the ones you presently do, you have to continue to use the tools you have and work on building and strengthening the system to allow a more hands off approach.”

He added: “There is no short cut or easy solutions in terms of dealing with exchange control issues. If you don’t fix the system and you liberalize the problems will just show up similar as if you do not liberalize.”