Following last year’s reported crisis regarding the availability of foreign currency in the local market, the Bank of Guyana (BoG) now has an excess of over US$75 million in foreign currency.
This was revealed by BoG Governor General, Dr Gobind Ganga during a recent interview with Guyana Times.
“Currently, we have almost US$75 million of excess supply of foreign currency in the market with commercial banks, and we are hoping that this excess supply will drag the rates down further than where it is. So, it is not in shortage; there is excess supply of 75 million or more US dollars in the market,” Dr Ganga asserted.
He reiterated that there was, in fact, no shortage in the availability of foreign currency last year.
Dr Gobind Ganga
“There was never a situation where there was a shortage. Remember this was because of a number of factors that were impacting this expectation, which was really destabilising expectation, and we have come out of that all because of, once again, the expectations that were being purported out there…,” the BoG Governor General posited.
While both the Central Bank and the Government had maintained that there was no foreign currency crisis, several commercial banks and cambio dealers had insisted otherwise, jacking up the exchange rate for US dollars.
In fact, business owners had also complained about the apparent foreign currency shortage, saying that they were unable to readily make overseas payments by draft or wire transfer for products and services from overseas. Even citizens had borne the backlash of the crisis by paying high exchange rates.
Both Dr Ganga and Finance Minister Winston Jordan had posited that businesses might be hoarding foreign currencies, and commercial banks and cambios were claiming shortages in order to cause customers to resort to paying exorbitant rates for foreign currencies.
“The Governor has assured me that he doesn’t know anything about [the shortage], because the banks haven’t approached him for foreign exchange,” Minister Jordan had said on a radio programme during the contrived scarcity of foreign exchange.
Usually, when commercial banks experience a shortage, they turn to the Bank of Guyana to purchase the currency to meet demand. But no such approaches were made.
While the Central Bank’s Governor General does not foresee a repeat of last year’s situation, financial experts had warned that there could be another such crisis.
In fact, former Junior Finance Minister Juan Edghill had said, in October, that if Government did not curb the excessive spending on international travel by its officials, then the foreign currency reserves at Central Bank would be depleted.
During his 2018 Budget presentation back in November, Minister Jordan had said that the Bank of Guyana’s exchange rate for the Guyana Dollar to the US Dollar is expected to remain stable at $206.5 throughout this year, while adding that the US Dollar had appreciated by 1.6 per cent against the Guyanese Dollar.
He had noted too that earlier in 2017, the Central Bank had moved to implement countermeasures to prevent manipulation of the foreign exchange rate and to ensure a greater and smoother flow of receipts to the foreign currency market.
