november 2012 had a one - off impact on reducing food price inflation. core inflation, which excludes food prices, remains low and stable, indicative of relatively subdued demand pressures. buoyant liquidity conditions, poor credit appetite and the cut in the repo rate have pushed interest rates to historical lows. however, we are yet to see a broader pick up in business lending. credit granted by the consolidated financial system to the private sector grew slowly throughout 2012 and at a fairly gradual clip of 2 – 3 per cent in the first four months of 2013. of concern is that business credit, which showed hopeful signs of recovery in the first half of 2012, has subsequently lost momentum. meanwhile, we have seen strengthened consumer lending, with increases in borrowing recorded for motor vehicles, home renovation and educational purposes. even though real estate mortgage lending remains the only credit category demonstrating vibrant double digit growth there is no compelling evidence of overheating in the property market. according to data provided by private valuators, the estimated median price of a typical 3 - bedoom today is about 10 per cent lower than the peak in median house prices in early 2012. more importantly, commercial banks have maintained their mortgage lending standards, with still conservative loan - to - value and loan service - to - income ratios. given the gradual pace of economic recovery and the stability of core inflation, the central bank has maintained an accommodative monetary stance. to provide a needed boost to economic activity, the bank cut its key policy rate, the repo rate, by 25 basis points to a record low of 2¾ per cent in september 2012, following 75 basis points of previous cuts since december 2010. lethargic credit demand and high net fiscal injections have led to a considerable build - up of excess liquidity in the financial system. commercial banks ’ excess reserves held at the central bank rose to an average of around $ 5½ billion in the first half of 2013, from a daily average of nearly $ 4 billion in the first half of 2012. the bank continues to absorb some of this excess liquidity through open market operations and through requesting commercial banks to roll over maturing holdings of interest - bearing special deposits held at the bank. sales of foreign exchange by the bank also indirectly removed some excess liquidity from the banking system. we also facilitated the issue of a $ 1 billion, seven - year treasury bond in may 2013 to support our liquidity absorption efforts. these treasury bonds are purely for the purposes of

in corinth, south trinidad. 2. ansa mcal ’ s $ 400 million state of the art clay plant, which is expected to be the single largest investment in the construction this year. 3. a us $ 600 million joint venture among neal and massy, russian firm severstal international and metaldom from the dominican republic to build a vertically integrated iron and steel complex on union estate, la brea. 4. neal and massy ’ s project development agreement with mitsubishi corporation, mitsubishi gas chemicals company and the government of trinidad and tobago to construct and operate plants to produce methanol and dimethyl - ether ( dme ) at union estate, la brea. the project is expected to cost roughly us $ 850 million. i commend these business leaders for their vote of confidence in the country ’ s economic prospects, but it is not enough. we need the entire business community to stop watching and commenting on the game from the sidelines. ladies and gentlemen, there is a view that business must stop feeding from government. and business must start feeding government. i remind you of the damning words that ralph maraj in his december 31, 2012 column in the trinidad express entitled “ the private sector can ’ t dance ” had for the business community : “ for the past few years, most of our business elite have been sitting on their resources, marking time but still accumulating ; only a few venturing to take some measured risk to stimulate the economy ; most waiting, as always, for the treasury to provide new feeding. and they continue to absurdly shout to the government “ diversify, diversify ”, as if they had no responsibility in this critical national need. ” peter o ’ connor in his sunday june 30 newsday column entitled “ lacking leadership ” echoed similar concerns. “ which businessman here, with the banking system drowning in liquidity, has the vision and capability to diversify our economy instead of begging government for “ corporate urp ”? since the central bank is not the only game in town, i take this opportunity to remind the entire business community of their responsibilities and urge them back onto the field. my appeal to you is to take a longer term perspective and invest in people and technology to raise our growth level and to make our growth more inclusive. play the game passionately, intensely and fearlessly! bis central bankers ’ speeches conclusion in conclusion, i wish to reiterate that trinidad and tobago has been navigating