The Trinidad and Tobago Central Bank (CBTT) has kept its repo rate unchanged at 3.50 per cent, pointing to growing global uncertainty linked to the ongoing war involving the United States, Israel and Iran.

In its latest monetary policy announcement released on March 27, the Bank said the conflict—now involving other Gulf States—has increased risks to global economic growth, although it is still too early to determine the full impact.

“Global economic conditions are marked by significant uncertainty,” the Monetary Policy Committee (MPC) said, noting that disruptions to trade, rising energy prices and volatile financial markets have already been observed.

“The positive boost to energy production during the second quarter of 2025, driven by two new natural gas fields, appeared to have waned by November 2025. Meanwhile, activity in the non-energy sector continues to slow. This may indicate that supportive financial conditions are still warranted. Upon consideration of the uncertain global economic conditions, ongoing softness in the non-energy sector, slower credit growth, stable foreign reserves and well-contained inflation, the MPC agreed to maintain the repo rate at 3.50 per cent.”

Energy prices have climbed sharply since the outbreak of the war, particularly following the closure of the Strait of Hormuz. Crude oil prices (West Texas Intermediate) rose from an average of US$64.57 per barrel in February 2026 to US$93.50 per barrel by mid-March. Brent crude has been more volatile, reaching close to US$120 per barrel during intra-day trading.

Natural gas prices also jumped significantly, increasing between 54 and 85 per cent over the same period.

Despite the turbulence, the CBTT noted major central banks have taken a wait-and-see approach. The US Federal Reserve held its benchmark rate at 3.50–3.75 per cent in March, citing uncertainty around inflation and economic growth. The Bank of England and the European Central Bank also kept their policy rates unchanged, although the ECB lowered its growth outlook for 2026 and raised its inflation forecast.

The Central Bank said the conflict has also unsettled global financial markets, with increased volatility across equities and rising US bond yields signalling higher inflation expectations.

At home, the picture remains mixed.

Data from the Ministry of Energy and Energy Industries showed crude oil production rose by 3.1 per cent year-on-year between October and November 2025, while natural gas output fell by 8.6 per cent. In the downstream sector, small gains in natural gas liquids were offset by declines in ammonia and methanol production.

Outside the energy sector, activity continued to slow, particularly in wholesale and retail trade, construction and manufacturing. However, agriculture and utilities recorded some improvement.

Inflation has remained low so far this year. Headline inflation stood at 0.6 per cent in February 2026, down from 1.0 per cent in September 2025. Core inflation rose slightly, while food prices dipped, largely due to lower vegetable prices.

Financial conditions remain generally supportive, with liquidity in the banking system still ample. However, credit growth has slowed, with private sector lending expanding by 5.4 per cent in January 2026, down from 6.3 per cent in October 2025.

“Building resilience to safeguard the domestic economy against external shocks is paramount,” the MPC said.

The Bank said foreign reserves have remained relatively stable at around US$5.4 billion since December 2025, though some indicators suggest the need for further strengthening.

Given the uncertain global outlook, softer domestic activity and contained inflation, the MPC said it decided to hold the repo rate steady.

“The MPC will actively monitor global economic developments… particularly the potential for adverse spillover effects for domestic inflation and economic growth,” the statement added.

The next monetary policy announcement is scheduled for June 26, 2026.