CBTT Will Maintain Loose Posture Through 2021 As COVID-19, Energy Prices Weigh On T&T Economy

• Fitch Solutions expects the Central Bank of Trinidad & Tobago (CBTT) will reduce its benchmark interest rate 50 basis points (bps) to 3.00% by end-2020, and hold the rate at 3.00% through 2021 to support economic activity in the wake of the COVID-19 pandemic.
• Low inflation and international conditions, including the expectation for an extended period of low rates in the US, will support continued loose monetary policy.
• However, we believe the CBTT is nearing the bottom of its current easing cycle, as COVID-19 economic restrictions limit the transmission of lower interest rates into the real economy.

(Source: Fitch Solutions)