4:00 PM Port of Spain, Trinidad – Central Bank of Trinidad left its key lending rate at 5% and noted higher food price inflation to persist for a while but non-food prices are expected to decline further on weak domestic demand.

Central Bank of Trinidad & Tobago left its repo rate at 5%. Central Statistical Office said Index of Retail Prices increased to 5.1% in March from 4.8% in February after a sharp rise in food prices.

Food prices in the period increased 6.9% compared to 6.1% in February.

Core inflation rate that excludes food prices was unchanged at 4.1% from the rate in February.

The central bank noted in the statement, “The relatively high levels of excess liquidity over the past several months have helped to suppress short-term interest rates which have continued to fall.”

The three-month Treasury bill rate declined to 1.15% by April 21 from 1.85% in September 2009 and the 3-month Treasury bill rates spread to the U.S. rates narrowed to 100 basis points in April from 173 basis points in September 2009.

Central bank estimated higher food price inflation as drought condition prevail but “weak domestic demand” and “abundant spare capacity” could exert downward pressure on non-food prices.

Central Bank of Trinidad & Tobago said on April 21 that it completed the sale of 13-year bonds at 5.75% coupon rate. The issue was oversubscribed to the tune of TT$1.2 billion and yielded 5.75%.