- Decision
- Maintain
- Rate change
- 0 bps
- repo rate
- 3.5%
The Monetary Policy Committee of the Central Bank of Trinidad and Tobago kept the repo rate at 3.50 percent in its 27 June 2025 announcement, citing a balance between subdued domestic inflation and solid credit-driven activity on one hand and heightened global uncertainty from Middle East tensions and volatile oil prices on the other. The policy rate has now been unchanged at 3.50 percent since at least March 2025. Ample system liquidity persisted—commercial-bank excess reserves averaged TTD6.6 billion in May before slipping to TTD5.3 billion in early June—contributing to softer local 3-month Treasury yields and widening the negative TT-US spread to –222 bp in May. Headline consumer inflation inched up to 1.4 percent y/y in May from 0.7 percent in January, with core inflation at 0.7 percent and food prices rising 4.1 percent, while economic activity remained positive despite a 5.9 percent y/y fall in Q1 natural-gas output and cooling momentum in some non-energy industries. Private-sector credit growth accelerated to 9.1 percent y/y in April, led by business and consumer lending, prompting the Committee to flag the need for vigilance on credit quality, especially as forthcoming fiscal financing could influence liquidity conditions. Globally, the IMF sees 2025 growth slowing to 2.8 percent and inflation at 4.3 percent, while Brent crude’s brief surge to USD76/bbl and the US Federal Reserve’s steady 4.25–4.50 percent funds rate underscore an uncertain external backdrop. The central bank reaffirmed its readiness to reassess policy as domestic and international conditions evolve.
Rate evolution
From June 2025 to June 2026, the Central Bank of Trinidad and Tobago kept the repo rate unchanged at 3.50%, maintaining a prolonged pause as inflation stayed low and domestic growth softened while external uncertainty rose. Early decisions emphasised contained headline and core inflation, favourable financial conditions and initially strong but moderating credit growth, alongside slowing non-energy activity, with the Monetary Policy Committee also watching credit quality, liquidity conditions and the effects of fiscal financing.
By late 2025, the Committee said the economy still needed support because gains in the energy sector were being offset by weaker non-energy momentum, but it placed greater weight on external stability, citing the narrower Trinidad and Tobago-United States rate differential, the risk that wage adjustments could lift demand and imports, and the need to safeguard foreign reserves. In March 2026, as war in the Middle East lifted energy prices and market volatility, the Bank again held, judging that well-contained inflation, slower credit growth and non-energy weakness warranted supportive funding conditions, while stressing uncertainty, reserve adequacy risks and readiness to adjust policy if needed. It maintained the repo rate again in June 2026, noting that headline inflation had eased to 0.3% in May and core inflation was unchanged at 0.8%, while overall activity may have slowed in the first quarter as natural gas constraints moderated energy output and uncertainty weighed on business confidence and investment in the non-energy sector. The Committee also cited slower private sector credit growth, ample system liquidity and a less favourable global backdrop of weaker growth prospects, elevated inflation and tightening monetary conditions, and said it would continue to monitor developments and take further actions as necessary.