Economist warns of foreign exchange squeeze

One of Barbados’ leading economists sees some challenges around the corner for the country if the trend of rising international interest rates persists.

Winston Moore, professor of economics and deputy principal at the University of the West Indies, Cave Hill Campus, said while the country’s $3.1 billion in foreign reserves at the end of June “gives us room to absorb a shock”, Barbados could potentially face a foreign exchange squeeze.

He was speaking of an outcome where “higher oil prices raise the import bill, while slower growth abroad could weaken tourism receipts, so foreign exchange is squeezed from both directions: more going out, less coming in”.