Chamber to probe foreign currency shortage

Jan 13, 2017 News

-to seek an audience with Central Bank, Banking Association

The Georgetown Chamber of Commerce and Industry (GCCI) is concerned that local banks are making claims that there is a shortage of foreign currency even though the Central Bank insists otherwise.

Central Bank Governor, Dr. Gobind Ganga

As a result, it is expected to meet with the Banking Association soon to ascertain who is really telling the truth.
This is according to President of the GCCI, Vishnu Doerga.
Speaking with this newspaper yesterday, Doerga said that he is of the firm belief that there is a shortage of foreign currency in the banking system as his own company is experiencing the effects of it. In this regard, he shared that he was placed on a waiting list for a week for transfers to be effected.
The GCCI Chairman said that the situation hampers the private sector logistics since businesses are unable to pay suppliers in a timely manner, thereby delaying shipments. The scarcity also leads to the exchange rates being increased, he added.
The entrepreneur also noted that the Chamber has been receiving complaints about the shortage from other banks about the issue. He stated that the Chamber will make moves to ascertain how many businesses are being affected by the issue.
Up to yesterday, local banks informed some businessmen that they are unable to do transactions ranging from US$80,000 to as low as US$5,000. The excuse given is that there is a shortage of foreign currency within the system.
Inquiries made by this newspaper also showed that the situation remains the same. Some banks are proffering the explanation that they sell the USA currency based on what is brought in by their customers. Such is the case with Republic Bank.
When Kaieteur News made contact with the Camp Street branch, it was told that a transaction of US$30,000 or even US$2,000 could not be done. A supervisor subsequently stated that there is a shortage and that checks should be made at the Republic Bank branch at Water Street. But this too was not successful.

GCCI Chairman,
Vishnu Doerga

Representatives at the branch stated that the amount was not available and that “there seems to be a shortage for some time now.”
The official told this newspaper that checks should be made at a later date.
In other cases, some banks are stating that customers would have to go on a waiting list and the time for their request to be facilitated is not guaranteed. They insist that they cannot guarantee that the waiting list process would result in the transaction being effected within two or three days.
Central Bank Governor, Dr. Gobind Ganga, insists however that the banks have foreign currency.
”I don’t know what they are going on with. There is no shortage. All the banks have money. What is happening is that some of them are just holding on to their money. The foreign currency situation has even improved significantly from last year to now!”
Another senior banking official at the Central Bank asserted, “All the banks can provide foreign currency to the consumers, but they are trying to be difficult. Some of them are keeping the money so they can send it to their other branches in the region.”
In addition, Dr. Ganga stressed that there was no reason for concern.
”There is no foreign currency crisis looming in Guyana. The fact is, we have a net supply of foreign currency in the system, so there should be no depreciation of the currency by any significant amount. It is not a situation where there is a piling up of demand for foreign exchange at the commercial banks,” Dr. Ganga said.
He even provided details which illustrate that the current foreign exchange reserves held by the Bank of Guyana and the commercial banks were in excess of the 2015 figures.
”Commercial banks have increased their foreign exchange holdings. In 2015 they had a gross holding of US$357M. As of September 2016 it was US$388.4M, and we were expecting the commercial banks to hold approximately US$403M by the end of the year,” Dr. Ganga revealed.
He said, “The (commercial) banks have money… and they have quite a lot. It is not a small amount. The Bank of Guyana had US$598M at the end of 2015, currently we are holding close to US$625M which is much more than last year. You can see, therefore, that there is an increase in foreign exchange availability from the holdings.”

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