Central Bank signs MoU with Finance Ministry to ensure transparent management of Natural Resource Fund

Dec 12, 2019 News

A Memorandum of Understanding (MoU) was signed yesterday between Finance Minister, Winston Jordan, and Bank of Guyana Governor, Dr. Gobind Ganga as it relates to the Bank’s obligations as Operational Manager of the Natural Resources Fund (NRF).

Bank of Guyana Governor, Dr. Gobind Ganga watches on as Finance Minister, Winston Jordan does his part in signing the MoU

The MoU was signed at the Ministry of Finance’s Board Room before the press. There, it was noted that the Fund would be held at the Federal Reserve Bank of New York where it would earn interest.
Kaieteur News understands that this is not unusual. In fact, Dr. Ganga noted that Guyana has used the Federal Reserve Bank for more than 50 years and is now awaiting the completion of a due diligence process.
The Ministry noted that the NRF is now one step closer to being operationalised following the signing of the MoU.
The document sets forth the responsibilities of the Bank of Guyana as the Operational Manager of the NRF. These include receiving and accounting for all deposits into the NRF; investing the NRF in eligible asset classes; appointing private managers and custodians; and reporting on the performance of the NRF on a monthly, quarterly and annual basis.
It also outlines that Central Bank will have to implement management systems, procedures and risk management arrangements in accordance with international standards; and provide the public with information on the NRF as required by law; among others.
The MoU which will be published on the Ministry’s website in accordance with Section 42 of the NRF Act, also includes the obligations of the Minister of Finance as the overall manager of the NRF.
Additionally, the MoU identifies certain principles for the operational management of the NRF to ensure transparency and accountability. Other important aspects of the Agreement include the fees to be charged by the Bank of Guyana, procedures for the appointment of private managers and custodians, and the liability for losses that may occur.
In preparation for its role as operational manager of the NRF, the Bank of Guyana has begun building additional capacity, supported by the World Bank’s Reserves Advisory and Management Programme (RAMP), with whom an agreement was signed on October 1, 2019.

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