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Foreign currency stabilized
-Central Bank reports excess in the system
After several media reports of a shortage, Central Bank has been able to successfully stabilize
Central Bank Governor, Dr. Gobind Ganga
the foreign currency system.
Officials at the Bank told this newspaper yesterday that there is even an increase of US dollars in the system. The officials said that the excess is between US$10M and $20M.
The selling rate is now between $208 and $210 for US$1 at most financial institutions.
The senior officers said, “While there were reports that there was a shortage in the system, we have always maintained that this was not the case. We have said on several occasions, that there was money in the system but various tactics were being employed by a few…”
Be that as it may, Kaieteur News had carried out a number of investigations in the past, all of which indicated that some banks were reporting to customers that the US dollar was not in abundance.
The Caribbean Region Quarterly Bulletin 2017 report, which is on the Inter-American Development Bank (IDB) website, says that the Central Bank of Guyana (BOG) implemented a series of policy measures to restrict hard currency demand to address shortages in the domestic market.
It noted that on February 2, 2017, BOG issued a cabinet certified directive to licensed currency dealers, which include commercial banks and non-bank cambios, to limit the spread between the buying and selling rate for the US dollar to no more than $3 while instructing commercial banks to restrict credit card purchases in foreign currency to non-business purchases.
The report said that authorities claimed the measures will improve the efficiency, depth, and liquidity of the foreign exchange markets. It added, “The inflow of US dollars declined in 2016 due to drops in non-gold export sectors, lower remittances, and less FDI (Foreign Direct Investment) compared to previous years, while demand for dollars has remained steady or possibly grown, resulting in a shortage.”
The report also stated that monetary authorities attempt to manage inflationary expectations by anchoring the exchange rate through frequent sterilization exercises.
Even though the IDB in its special report made such an observation, Central Bank Governor, Dr. Gobind Ganga insisted otherwise. Dr. Ganga said that he disagreed with the information, while noting that reserves for last year in fact, saw an increase.
The Central Bank head said that he has the figures to prove otherwise. In fact, he said that reserves at the Bank of Guyana have improved from approximately US$598M at the end of 2015 to about US$625M at the end of 2016, representing an increase of US$28M.
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