There is no shortage of foreign exchange in Guyana- Finance Minister, BoG

Minister of Finance Winston Jordan and Governor of the Bank of Guyana, Dr. Gobind Ganga have both debunked an article appearing in today’s edition of the Kaieteur News headlined “Major foreign currency crisis looms”.

“There is no shortage of foreign exchange in Guyana, the reserves at the Bank of Guyana have improved from approximately US$598 at the end of 2015 to about US$625M at present, an increase of US$28M,” Minister Jordan revealed in a statement from the Department of Public Information.

The Minister said when you consider the holdings by commercial banks, foreign reserves have also increased in the system from approximately US$955M at the end of 2015 to US$1.042B at present. “Therefore, there is no shortage of foreign exchange, consequently, there is no foreign exchange crisis looming, and no need for the currency to depreciate” he added. The Bank of Guyana will take all necessary actions to protect the currency and to protect the reserves at the Bank of Guyana,” Minister Jordan said.

Dr. Ganga concurred with Minister Jordan that there was no reason for concern. He noted that “it’s a misleading article, the headline is even more misleading. The fact is we have a net supply of foreign currency in the system, so there should be no depreciation of the currency by any significant amount.”

“It is not a situation where there is a piling up of demand for foreign exchange at the commercial banks”, Dr. Ganga emphatically stated.

He provided details which illustrate that the current foreign exchange reserves held by the Bank of Guyana and the commercial banks were in excess of the 2015 figures.

“Commercial banks have increased their foreign exchange holdings. In 2015 they had a gross holding of US$357M, as of September 2016 it was US$388.4M and we are expecting the commercial banks to hold approximately US$403M by the end of the year,” Dr. Ganga revealed.

According to the statement, the official further noted that the Bank of Guyana is currently holding close to US$625M which is much more than last year.

The BOG Governor said that an increase in the circulation of Trinidad and Tobago and Barbadian dollars in the Guyanese economy has been noticed and that this indicates that these currencies are being converted into Guyana dollars then used to purchase US currency.

“Since 2014 we have had a significant supply of CARICOM currency in the (Guyanese) system more specifically, for example, we had an increase in Trinidad and Tobago dollars from TT$9.1M in 2014 to TT$24.4M in 2015 and in November of 2016 TT$38.3M. You will find that it is very difficult to get foreign exchange in Trinidad in particular, so what is happening is that we have this flow of TT dollars coming into Guyana, converted to Guyana dollars and then used to purchase US dollars,” Dr. Ganga explained.

“We have also had a significant inflow of Barbadian dollars. From 2014 of BD$8.3M to BD$13.5M in 2015 and as at November 2016 it is at BD$12.3M. So you can see that we are also supplying foreign exchange to other countries in the region,” he added.

It was also noted that Suriname also has major issues as there is a conversion of cash from Guyana dollars to US dollars and then repatriated to Suriname at the borders.

Minister Jordan said that this issue will be addressed.

“The issue as it relates to the Trinidad and Barbados currencies flooding our market will be looked at and action will be taken to ensure that this occurs in a normal way rather than it being here just to buy up foreign currency,” Minister Jordan explained.

With regard to the issue of difficulties of remitting monies, Dr. Ganga dismissed the assertion and assured that there is no problem and confirmed that all commercial banks in Guyana have at least one corresponding international bank.

(Department of Public Information)