PriceSmart explained that ongoing challenges due to limited U.S. dollar availability in Trinidad and Tobago (T&T), have impacted its ability to convert T&T’s dollars to meet its obligations and support investments. Despite these constraints, PriceSmart– identified in 2015 by former Central Bank Governor Jwala Rambarran as the leading user of U.S. dollars in Trinidad and Tobago’s retail and distribution sectors– was able to reduce its T&T dollar holdings by U.S.$82.3 million.
PriceSmart, headquartered in San Diego, California, owns and operates membership shopping warehouse clubs in Latin America and the Caribbean. It has four warehouse clubs in Trinidad and Tobago.
“Periodically, we experience a lack of availability of U.S. dollars in certain markets (U.S. dollar illiquidity). This can and has impeded our ability to convert local currencies obtained through merchandise sales into U.S. dollars to settle the U.S. dollar liabilities associated with our imported products and to otherwise redeploy these funds in our company,” the company explained.
Pricesmart said this illiquidity also increases foreign exchange exposure to any devaluation of the local currency relative to the U.S. dollar
“For instance, during fiscal year 2021, we experienced significant limitations on our ability to convert Trinidad dollars to U.S. dollars or other tradable currencies. Our balance as of August 31, 2023, of Trinidad dollar denominated cash and cash equivalents and short and long-term investments measured in U.S. dollars, was $18.2 million– a decrease of $82.3 million from the peak of $100.5 million as of November 30, 2020,” PriceSmart stated.
PriceSmart said since 2017 it has been unable to source a sufficient level of foreign exchange. However, the company is working with its bankers in Trinidad and Tobago, as well as government officials, “to convert all of our Trinidad dollars into tradable currencies.”
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Publish date : 2024-11-06 07:34:00
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