At the same time, the external setting shows that the rise in foreign interest rates has not been matched by a similar move in domestic rates, so that the domestic vs foreign interest differential has narrowed over the past year. A further lowering of local rates could exacerbate the situation, especially given the clear and present prospects of rate rises in the US.
This could then lead to a disincentive to portfolio capital directed toward Trinidad and Tobago; a similar 5  consideration is currently preoccupying authorities in many emerging and developing market countries. The Central Bank of Trinidad and Tobago has navigated this dilemma over the past year or so by keeping a neutral policy stance and the repo rate stable. 10.