Oil Funds: Guyana’s account at NY Federal Reserve up and running

Guyana’s Natural Resource Fund (NRF) is now up and running at the New York Federal Reserve Bank, the Ministry of Finance has confirmed.

Those who buy Guyana’s oil will deposit the money directly into the account, a Ministry of Finance official told the News Room.

The Fund is set up in the name of the Bank of Guyana, which has the responsibility to manage the account.

The Bank of Guyana and the Ministry of Finance recently signed an agreement detailing how the Fund will be managed.

Governor of the Bank of Guyana, Dr Gobind Ganga, had said the New York Federal Reserve Bank was chosen since 2017.

“…you want to put your money in the safest possible institution. There are a number of them, but the Fed is one of them.

“The Fed was approached long back,” Ganga had said on December 11, 2019.

The funds will be earning different interest rates as it increases, Minister of Finance, Winston Jordan had said, noting that the aim is an average of 3% over time.

Guyana recently agreed to sell Shell its first three million barrels. Those sales will happen by the end of July, the government had announced. The government has not indicated the price it has sold the oil to Shell for.

The Bank of Guyana is responsible for the management of the fund including receiving and accounting for all deposits into the NRF, investing the NRF.

In eligible asset classes, reporting on the performance of the NRF on a monthly, quarterly and annual basis and providing the public with information on the NRF as required by law, among others.

In preparation for its role as operational manager of the NRF, the Bank of Guyana has begun to build additional capacity supported by the World Bank’s Reserves Advisory and Management Programme (RAMP), with whom an agreement was signed on October 1, 2019, according to the Ministry of Finance.

According to the bill governing the fund, the governor and other officials will face penalties for acts of omission or negligence.

The Natural Resources Fund Act also provides for the appointment of three committees to manage the revenues. Those committees are the Macro-economic committee, the oversight committee and the investment committee.