Maroc - NEWSDAY.CO.TT - A la Une - 11/Sep 07:00

It is the SMEs who will suffer

THE EDITOR: Importers are very aware of the exchange rates and the financial implications. With the black market rate hovering around TT$8 to US$1, businesses already face high costs for forex, especially when shipping companies and service providers are collecting forex directly or converting TT dollars at rates around TT$7.50 to US$1. This operational “bracing” means they are effectively hedging against any potential devaluation, already operating in a system that has adapted to current market realities. For the one per cent, or large corporations with easy access to forex and the ability to hedge risks, a devaluation might have limited immediate impact since they've already incorporated these concerns into their business models. However, it’s the SME (small and medium enterprises) sector that’s most vulnerable – lacking access to foreign currency, hedging options or financial buffers. SMEs will likely face increased costs, reduced competitiveness and cash flow challenges should a formal devaluation be enacted. This reality underscores the need for targeted support for SMEs, as they are less equipped to manage currency fluctuations. Effective policy measures should focus on stabilising the currency, providing forex access, and supporting local production to safeguard these smaller players from potentially devastating impacts of currency devaluation. Ultimately, the system has already absorbed much of the risk – policy must now protect the most vulnerable, particularly our SMEs. GORDON LAUGHLIN Westmoorings The post It is the SMEs who will suffer appeared first on Trinidad and Tobago Newsday.