So far, we've discussed almost every interesting development at today's House sitting. But one matter of pressing political importance that didn't come up at all was the massive multi-million dollar loss government faces because of an ill-advised currency swap. 7NEWS broke the story on Wednesday (See GOB's Losing Bet in the Derivatives Market) when we explained that government had basically used public money to gamble on currency values. The deal, overseen by then Minister of Finance Ralph Fonseca, bet US$40 million on the expectation that the value of the Japanese Yen would weaken against the U.S. dollar over a 5 year period. That was in the year 2000 and since then the Yen has instead strengthened and government will now lose millions by the percentage of which it is strengthened. Government's money managers now say the loss will be $6 million gone just like that because of a bad gamble. But today the Prime Minister said, don't blame him.
Said Musa,
"There was a net loss of about US$3 million."
Jules Vasquez,
Do you hold yourself accountable for that?
Said Musa,
"No, this is why we have a Central Bank; they were the ones that recommended it. You want me to accept responsibility for all the decisions of the Central Bank?"
Jules Vasquez,
But you are the person elected to manage the people's money.
Said Musa,
"Well first of all it occurred before I became the Minister of Finance, but the important thing is that it was a decision of the board of the Central Bank."
Jules Vasquez,
But would you accept now that it was a reckless and ill-advised decision?
Said Musa,
"I would have to examine what were the circumstances at the time, the facts available to the Board, to make such a statement."
The US$3 million loss is payable at the end of this month when the US$40 million bond to which it was attached becomes payable.
