- Decision
- Maintain
- Rate change
- 0 bps
- repo rate
- 3.5%
The Monetary Policy Committee of the Central Bank of Trinidad and Tobago on 31 December 2025 kept the repo rate at 3.50 %, judging that headline inflation of 0.5 % y/y in November, a matching 0.5 % core rate and easing private-sector credit growth outweighed the still-tentative non-energy outlook despite a 10.4 % y/y rebound in energy output in Q2. The policy rate has been unchanged at 3.50 % throughout 2025. Liquidity has firmed, with commercial banks’ excess reserves rising to TTD5.3 bn by mid-December, even as private credit growth slowed to 6.3 % y/y in October from 8.6 % in June. International reserves have stabilised at USD5.3 bn on 19 December, up from USD4.6 bn in October, while the negative TT-US 3-month treasury yield gap narrowed to –74 bp after successive US rate cuts. Against a backdrop of softer global growth, lower energy prices and a broad shift toward monetary easing—most recently the US Federal Reserve’s 25 bp cut to 3.50–3.75 % and initiation of USD40 bn monthly bond buy-backs—the committee signalled it will watch the impact of impending wage adjustments on demand and imports and stands ready to act to balance reserve protection with support for domestic activity ahead of its 27 March 2026 policy announcement.
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.