Latest update December 18th, 2024 5:45 AM
Latest News
- Stabroek Block offers unique opportunities for highest return on investment – Exxon’s VP
- EPA’s unlawful conduct, lax regulation would implicate the US in any resulting harm from gas project- Int’l lawyer tells US EXIM Bank
- Israeli attacks kill dozens across Gaza as ceasefire talks continue
- Prime suspect in Toshao’s murder surrenders
- Gas-to-Energy project gets initial approval for US$500M loan from US EXIM Bank- US Official
Hoarding, low sugar performance blamed for rising exchange rates
Guyana’s rising exchange rates may be blamed on a number of prevailing factors, including reduced proceeds from sugar and a steep drop of gold prices on the world market.
Over the past months, the exchange rate of Guyana dollar to the US climbed from $200 to US$1 to just over $210, a worrying trend for businesses and the administration.
It is not likely to drift down in a hurry, analysts have said.
While banks were advertising trading on average between $204 and $209, businesses have been complaining of hardships in acquiring significant amounts.
Foreign currency shortages have been blamed largely also on a reduction of remittances to Guyana, as the global economy continues to suffer the effect of a downturn.
The regulator, Bank of Guyana, has been making interventions from time to time releasing much needed foreign exchange into the system.
Last year, the failure of the US$850M-plus Amaila Falls hydro project and the halting of the Specialty Hospital, as well as the slashing of budget for the expansion of the Cheddi Jagan International Airport (CJIA) have all not been helping to generate some of the foreign exchange needed.
Also, the actual trickle down of proceeds from Norway’s US$250M climate fund deal has not been significant.
The sugar industry remains the biggest of worry for the administration.
Last year, the industry slid to a 23-year low with production falling to 187,000 tonnes, far below the 260,000 tonnes set at the beginning of the year. This year, the target is set at 216,000 tonnes.
With the Opposition urging Government to study other options like ethanol for the industry, the need to bring production up to higher levels remains top of the minds of the administration.
The drop also in gold prices last year after a run that saw prices touching almost US$1,900 per ounce has not been good for Guyana. However, plunging prices to just over US$1,200 have worried miners.
Banking officials believe that hoarding of foreign currencies, like the US dollars; have also helped to drive the exchange rates up.
With the price hovering around US$1,380 yesterday, the situation looking a little more stable for gold.
Insiders have also believed that the commercial banks may have also been playing a part in rising exchange rates with hoarding a very real possibility.
Whatever the reasons are, it is not likely that the exchange rates will go down anytime soon, a senior manager of the banking sector has said.
Similar Articles
THE BLUNT OF THE DAY
Sports
Features/Columnists
The stakes are high in Guyana’s democracy
Peeping Tom… Kaieteur News- In any vibrant democracy, the mechanisms that bind it together are those that mediate differences,... more
Let the asylum seekers go: a first step for Venezuela to rebuild relations in the Americas
By Sir Ronald Sanders Kaieteur News – The government of Nicolás Maduro in Venezuela has steadfast support from many... more
Weekend Cartoon
