Central Bank Governor Dr Delisle Worrell is getting the support of another top economist in standing up to the International Monetary Fund’s (IMF) suggestion that devaluation could be good for the Barbados economy.
Professor Avinash Persaud says Worrell was right to hold his ground in the face of IMF Managing Director Christine Lagarde contending that devaluing the Barbados dollar would make tourism – the country’s biggest foreign exchange earner – more competitive and help the economy to grow.
“On the issue of whether a devaluation is right for Barbados, Governor Worrell is absolutely correct. Indeed, it is interesting that the IMF should be devoting so many resources to preserving European Monetary Union that is a fixed exchange rate system and then questioning such systems elsewhere where they are arguably more appropriate.
“From a Barbados perspective it doesn’t make sense. It would contract the economy and we’re right to avoid it,” he told the MIDWEEK NATION, after issuing a statement on the issue.
Persaud, who has worked with the IMF and European Central Bank, was reacting to a SUNDAY SUN report that Worrell and Lagarde had a difference of opinion over the merits of devaluation, during a breakfast meeting in Tokyo, Japan earlier this month, with the governor accusing the IMF of “persistently and consistently” giving small economies bad policy advice.
