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Level 3: Advanced

Foreign currency and the TT dollar

6 min read · Before you start: Lessons on inflation and on risk · Updated 31 October 2026

Key terms in this lesson: inflation · managed float · Spread · currency risk (all defined in the glossary)

Few money topics in Trinidad and Tobago come up as often as access to US dollars. This lesson explains the mechanics — how the exchange rate is set, why availability is tight, and what a foreign currency account does and does not do — without predicting where the rate goes next, which nobody can do reliably.

How the exchange rate is set here

The TT dollar operates under a managed float. The rate is not fixed by law to a set number, and it is not left entirely to the market either. Authorised dealers — the commercial banks and a small number of other licensed institutions — buy and sell foreign currency, and the Central Bank of Trinidad and Tobago monitors the market and intervenes.

Three terms recur in any quote:

• Buying rate: what a bank pays you for your US dollars.
• Selling rate: what a bank charges you to obtain US dollars.
• Spread: the gap between the two, which is the dealer's margin. Converting money and converting it straight back loses the spread.

Published rates vary between dealers and between the quoted rate and the rate on a card transaction. Rates also change, which is why no figure is printed in this lesson. The Central Bank publishes exchange rate data, and individual banks publish their own daily rates.

Why supply is tight

Foreign currency enters the country mainly through exports, which for Trinidad and Tobago are heavily weighted toward energy — oil, gas and petrochemicals. It leaves through imports, foreign debt payments, travel, online purchases, and money moved abroad. When export earnings fall and demand for imports does not, demand for US dollars exceeds the supply reaching the banks.

The US Department of Commerce's country commercial guide records that the Central Bank manages foreign exchange and has been addressing shortages since 2015 through regular injections of US currency from the country's foreign reserves. The practical result most people meet is a queue: banks ration what they distribute, credit card limits in foreign currency are capped, and large requests can require notice and documentation.

What rationing looks like in daily life

• Monthly foreign-currency spending limits on credit and debit cards, set by each bank.
• Wire transfers requiring supporting documents such as invoices or proof of purpose.
• Cash purchases of foreign notes limited by travel documents and amounts.
• Waiting lists for business import payments.

Foreign currency accounts

Banks offer accounts denominated in US dollars and sometimes other currencies. A few things about them are commonly misunderstood:

• They hold currency; they do not create access to it. Funding the account still requires obtaining the foreign currency, subject to the same availability.
• Interest rates are usually low, often lower than TT dollar deposit rates, because they reflect rates in the currency's home market.
• Deposit protection does not extend to them. As lesson 18 sets out, the Central Bank's public education material states that deposit insurance covers deposits held in Trinidad and Tobago dollars. A foreign-currency balance at the same bank therefore sits outside that cover. The Deposit Insurance Corporation is where the current position can be confirmed.
• Conversion costs apply twice if money goes in and later comes back out in TT dollars.

Currency risk

Holding money in a currency other than the one you spend in introduces currency risk. It cuts both ways. If the TT dollar weakens against the US dollar, foreign holdings buy more TT dollars than before. If it strengthens, they buy fewer. For someone whose bills, rent and groceries are all in TT dollars, foreign holdings are not a risk-free position — they are a different risk, and whether it suits a particular purpose depends on what the money is for.

The clearest case for holding a foreign currency is a known future expense in that currency: tuition abroad, a foreign-currency loan, a planned purchase from overseas. The case is weaker where the money is simply being stored, because then the exchange rate becomes a bet rather than a hedge.

Sending and receiving money

Remittance services, wire transfers and online payment platforms each charge differently. The headline fee is rarely the whole cost: the exchange rate applied is often less favourable than the mid-market rate quoted on currency websites, and that margin is a second cost. Comparing the total TT dollars that actually arrive — rather than the advertised fee — is how the options line up fairly.

Test yourself

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Not financial advice. This lesson is general education only. See our editorial policy and disclaimer.