Latest update November 23rd, 2024 1:00 AM
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BoG monitoring indirect effects of US financial meltdown
“Guyana’s foreign assets investment in USA safe…protected by legislation,” Deputy Governor
The Bank of Guyana is closely monitoring the indirect effects of the financial meltdown in the United States of America as it relates to foreign investors in Guyana.
This is according to Deputy Governor Dr Gobind Ganga, who noted that, given that the access to credit and loans in the US is now very restricted, the entity was monitoring the situation in the event that foreign investors in Guyana may have a hard time accessing loans.
According to Dr Ganga, if that were to happen, it would be very harmful for Guyana.
He did note, however, that some US$200 million in foreign assets, owned by Guyana and invested in the United States of America by the Bank, were safe from the meltdown.
He noted that the monies were invested only in federally-backed institutions and, therefore, were protected by legislation. Dr Ganga was in contact also with the commercial banks locally, since these also expressed confidence in their various investments being safe from the financial meltdown.
The financial crisis in the USA has since had a ripple effect around the world, causing the financial downturn to be termed ‘Global Financial fallout.’
President Bharrat Jagdeo, during the 63rd Session of the United Nations General Assembly in New York, lamented the possible effects of the phenomenon, saying that susceptible economies of countries such as Guyana would be adversely affected by the crisis.
According to President Jagdeo, the troubles in the global financial markets would result in the loss of thousands of jobs worldwide, and would worsen the already deteriorating business and consumer confidence.
“Even if they are not fully integrated with the global financial system, small vulnerable economies such as Guyana will bear the full effect of these developments as demand for exports tightens, the cost of capital rises, foreign direct investment becomes scarce, and tourist arrivals and migrant remittances decline.
“In short, economic growth and poverty reduction efforts will suffer a severe setback, and the Millennium Development Goals will become even more elusive,” he declared.
President Jagdeo said that the crisis was the sternest test in recent memory confronting the global financial system, and it was systematic in nature, historic in scale, and global in reach.
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