US$ transactions accounts for 94 percent of overall market activity

Jun 23, 2017 News

…as CARICOM currency transactions sees decline

While the Bank of Guyana did not purchase any foreign currency, it sold a whopping US$7.2 million to commercial banks in the first quarter of 2017. This is a strong indication of the overwhelming activity in the market involving the American currency.
Central Bank also stated in its Quarterly Report and Statistical Bulletin for 2017 that the debits and credits of authorized foreign currency to commercial banks were US$296.2 million and US$276.1 million respectively.
This indicated net purchases of US$20.1 million on these accounts.
The Bank of Guyana noted in its report that the corresponding period last year recorded debits and credits of these accounts at US$275.3 million and US$287.7 million respectively.
Interbank trade on the other hand, amounted to US$1.4 million in 2017 when compared with US$5.7 million for the same period last year.
Furthermore, Central Bank stated that the US dollar was the most traded currency on the market. In fact, US dollar transactions accounted for 94.2 percent of the overall market activity.
The report of the Bank said that the market share of the Pound Sterling, Canadian dollar and the Euro was 1.5 percent, 2.1 percent and 2.2 percent respectively. On the other hand, CARICOM currency transactions declined by 7.2 percent to US$6.4 million from US$6.9 million as at end-March 2016.
The report said, “The market share of the Trinidad & Tobago dollar was 52 percent, followed by the Barbadian dollar with 37 percent and the EC dollar with 11 percent of the aggregate turnover. The Guyana dollar vis-à-vis the United States dollar depreciated by 3.1 percent to G$213.”
It continued, “The Bank’s weighted mid-rate, which is the reference for official transactions, was unchanged at G$206.50 during the first quarter of 2017. The un-weighted rate experienced a depreciation of 2.4 percent, from $205.75 at the end of December 2016 to $210.75 at the end of March 2017.”
The Central Bank added that the local banks and non-banks reported higher buying and selling rates during the review period. It said that the difference in the selling rates of the bank and non-bank cambios was $2.92 compared with $1.70 for 2016.
It was further stated that the banks’ spread was higher at $4.25 compared with the non-banks’ spread was $2.18. The total market spread increased to $3.22 compared with $2.08 at the end of 2016.

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