Central Bank reports increased public spending …Bank reserves increase

Jul 19, 2017 News

As it moves to strengthen its internal systems, the Central Bank continues to place emphasis on ensuring that its monetary policy focuses on the attainment of price stability as well as the provision of an adequate level of liquidity for credit expansion. This is all in an effort to promote economic growth.

According to Bank of Guyana, it seeks to allow the expansion of broad money (money in any form including bank or other deposits as well as notes and coins) along a path that is consistent with projections for output and inflation.

Thus, weekly targets for broad money are translated into targets for base money. Base money refers to the total amount of currency that is either circulated in the hands of the public or in the commercial bank deposits held in the Central Bank’s reserves.

To achieve these weekly base money targets, the Bank focuses on the effective management of excess liquidity in the financial system through its Open Market Operations (OMOs).

The Bank may also purchase and sell foreign currency to achieve its primary objective.

According to the bank, during its review period for the second quarter, reserve money increased by $10.4 B compared with an increase of $6.5B for the corresponding period in 2016.

The Bank said that there were nine issues of Treasury bills amounting to $31.1B while redemptions amounted to $31B. It was noted that Treasury bills were issued when reserve money exceeded the targeted levels and was deemed likely to adversely affect the economy.

Additionally, the Bank sold US$7.2 million to the commercial banks while there were no purchases during the second quarter. Inter-bank market activities, which also provide an indication of the total liquidity condition of the financial system, had three trades during the review period.

There were no funds traded on the market for the period under review when compared with the $2.2 billion for the corresponding period in 2016.

Significantly, it was noted that the overall financial position of the public sector deteriorated from a surplus to a deficit due to higher current and capital expenditures which were relatively higher than increase in revenues.

Additionally, Central Government’s fiscal position shifted from a surplus of $545 million to a deficit of $917 million. This outturn resulted from higher current and capital expenditures by $6.1B and $4.6B to $38.5B and $7.2 B, respectively.

Total current revenues also expanded by 9.0 percent or some $38B. The growth in current revenues was attributed to greater receipts from Customs and Trade Administration and the Internal Revenue Department which expanded by $4.5B and $1.3B respectively.

Excise tax and Value Added tax were also higher by $2.4B and $1.013B taking them to $7.3B and $9.4B respectively.

Personal and corporation income taxes grew by 7.5 percent and 4.4 percent to $5.8B and $8.2B respectively. Total current expenditures expanded by 18.9 percent or $6.1B due to greater transfer payments of $2.2B and employment cost of $1.6B.

Central Bank noted that the expansion in employment cost was attributed to the growth in public sector employment along with the increase in wages and salaries.

Furthermore, it was noted that the Non-Financial Public Enterprises’ overall balance recorded a deficit of $1.0B compared to a surplus of some $6B during the second quarter of 2017.

Central Bank said that this was due to higher capital and current expenditures and lower current revenues.

The Bank noted that capital expenditures expanded for the Guyana Sugar Corporation (GUYSUCO) and Guyana Power and Light (GPL) by $529 million and $521 million respectively.

The National Insurance Scheme’s overall balance shifted to a surplus of $152 million from a deficit of $67 million in 2016, reflecting a 12.5 percent expansion in contributions of the employed and the self-employed.

Latest News

Central Bank reports increased public spending …Bank reserves increase

Related

Similar Articles

The Glenn Lall Show | December, 2nd, 2024

Follow on Tik Tok @Glennlall

THE BLUNT OF THE DAY

Sports

The wait is over, all roads lead to KMTC for their Grand Boxing Day...

Xhiya Hercules – flipping the script towards...

Road Warriors, Bent Street, Team Cruel &...

Deol maiden hundred outshines Matthews’ as...

Moraikobai village two days football competition...

BCB thanks cricket fraternity for strong support...

Features/Columnists

Merry Christmas, Ya Filthy Animals!

Breaking the Chains of Poverty: A need for political will

Christmas – reality and possibility

Publisher’s Note

Weekend Cartoon

Bridge Watch

Demerara Harbour Bridge

> Berbice Bridge […]

Central Bank reports increased public spending …Bank reserves increase

Share this:

Related

Similar Articles

The Glenn Lall Show | December, 2nd, 2024

Follow on Tik Tok @Glennlall

THE BLUNT OF THE DAY

Sports

Features/Columnists

Publisher’s Note

Weekend Cartoon

Bridge Watch

Demerara Harbour Bridge

> Berbice Bridge […]