Stabroek News

Trinidad gearing up for new $100 bill amid doubts

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(Trinidad Guardian) National Security Minister Stuart Young announced on Thursday that a Cabinet decision was made to remove the existing $100 bill from circulatio­n and replace it with a new, harder to counterfei­t note.

He said the measure was taken to fight money laundering, the financing of drugs and illegal firearms, tax evasion, the black money economy, counterfei­ting and other illegal activities.

As the 14 day countdown for the implementa­tion of the new polymer $100 bill ticks down, Guardian Media contacted economists Mariano Browne, Dr Roger Hosein, Dr Vaalmikki Arjoon and Mary King to weigh in on the issue. Mariano Browne:

“It may be helpful or it may not for the economy and small businesses when it comes on stream. They could become short-term exchange points and “sales” could increase in the next 14 days, for example in the rush to monetise cash balances illicit money could simply try to buy its way out.

“It could also have the effect of reducing confidence in existing $100 bills and have the reverse impact. Recalibrat­ing the banks’ ATM machines to be able to dispense the new polymer notes should not take too much time, but this was the busiest retail season of the year and mistakes can happen.”

He said, however, he was informed that ATMs will not be ready to dispense the polymer bills until mid-2020.

Browne said counting machines cannot check the polymer bills, the cost of the new machines was US $2,000 each.

He said reconfigur­ing the ATMs should happen in the first week, but removing “old “notes from the system was a timeconsum­ing task.

Replying to whether the changeover was an effective method to clean out “dirty” money, Browne said as long as there were dirty activities, there will be dirty money and this was a temporary, one-off exercise.

He said all it dealt with was the money that was currently “hoarded” and unbanked and the conversion process; it solved nothing.

Browne said there was nothing that said that a person cannot deposit more than $10,000 in an account, it simply said that the person must declare the source of funds.

He said the bank could still report the transactio­n as suspicious, so the efficacy of this exercise boiled down to the strength of the follow-up investigat­ions.

Browne said it was noteworthy that for all the increase in reporting, no one had been successful­ly prosecuted for money laundering.

When asked can this move fuel a new black market, he said perhaps the real question was can anything prevent the developmen­t of a black market.

Browne said scarcity, bad regulation­s or loose or poor enforcemen­t help create “black markets” and these conditions exist in T&T in several sectors.

Dr Roger Hosein said the new bill should have come out since the end of September.

He said in December, “the marginal propensity to consume” was the highest for the 12 months of the year and so there will be a heavy demand for cash.

Hosein said if people were being asked “to redeem what proportion of their transactio­nary, precaution­ary and speculativ­e balances that they had on their hands in the form of the “old” $100 bills to the new $100 polymer format, then this is likely to introduce into the system an unnecessar­y degree of panic and chaos which could have been more smoothly managed.”

 ??  ?? Mariano Browne
Mariano Browne

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