The External Sector of Trinidad and Tobago

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Macroeconomics 125
CRN:23846
Mr. Gerard E. Rodriguez
COSTAATT

Individual Assignment
* External Sector

Done by: Tabesha Neptune
Student Number: 00047428

Table of Contents

Title Page……………………………………………………………………………………………………………. 1 Table of Contents …………………………………………………………………………………………………… 2 Executive Summary ………………………………………………………………………………………………… 3 What is Balance of Trade? ……………………………………………………………………………………..........4 List of Trade Polices in Trinidad and Tobago ……………………………………………………………………… 4 What is Financial Flows? .......................................................................................................................................... 5 Show the Domestic and Foreign Financial Flows of Trinidad and Tobago …………………………………………5 What is Foreign Reserves? ………………………………………………………………………………………….. 6 The Purpose of Foreign Reserves ………………………………………………………………………………….. 6 Currency Valuation ……………………………………………………………………………………………... 6 – 7 International Investment Position of Trinidad and Tobago ………………………………………………………… 7 Bibliography ……………………………………………………………………………………………………….. 8

Executive Summary

This project is formatted to explain the bases of the external sector, giving definition for such terms as Balance of Trade, Financial Flows and Foreign Reserves. When dealing with the Exchange Rates short descriptions of the more common types or better known exchange rates system have been listed within this project. There is explanation for the investments, both domestic and foreign, of Trinidad and Tobago that shows the progress that this country has strived for and succeeded to acquire over the past recent years. This project briefly shows the need for the several components that make the external sector.

What is the Balance of Trade?

The Balance of Trade is the difference between the total amount of exports and the total amount of imports from a country. The Balance of Trade is also called the Net Exports (NX).

List the Trade Policies or Trading Agreements which governs Trinidad and Tobago.

Since Trinidad and Tobago is a member of CARICOM the country is held under CARICOM’s Trading Agreements such as the: * Bilateral trade Agreements with Dominican Republic, Venezuela, Costa Rica, Cuba and Colombia. Bilateral Trading Agreements is a formal Agreement between the parties that are involved in the agreement. CARICOM is currently engaged in negotiation with the Canadian Government about altering several of their existing trading agreements (Ministry of Trade and Industry Trinidad and Tobago)

What are Financial Flows?

Definition for Financial Flows or Cash Flows – Cash flows is the movement of money in to and out of a business, project or financial product. It is usually measured during a specified, finite period of time. (Wikipedia)

Show the Domestic and Foreign Financial Flows of Trinidad and Tobago.

Domestic Financial Flows of Trinidad and Tobago Entities – the private capital flows; (%GDP) in Trinidad and Tobago was 2.99 in 2009, according to a World Bank report published in 2010. The private capital flows; total (%GDP) in Trinidad and Tobago was reported at 7.44 in 2008, according to the World Bank. For this reason Trinidad and Tobago was reported to have one of the highest per captia incomes in Latin America. Trinidad and Tobago’s economic growth in the recent years has been supported mainly by investments in liquefied natural gas (LNG), petrochemicals, and steel. The nation is also considered as a regional financial center and has a growing tourism sector as well. (Trading Economics)

Foreign Financial Flows of Trinidad and Tobago – the latest value for net financial flows, International Bank of Reconstruction and Development (IBRD) in Trinidad and Tobago was US$7,672,729.00 as of 2009. Over the past 24 years, the value for this indicator has fluctuated between US$20,770,800.00 in 1993 and US$15,239,380.00 in 2004. (Index Mundi)

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