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Interest on Natural Resource Fund suffers blow due to COVID-19
Quarterly report reveals…
In an effort to temper the economic blows of the COVID-19 pandemic, the Federal Reserve Bank of New York which holds Guyana’s Natural Resource Fund (NRF) has lowered its interest rates, resulting in the profit on Guyana’s deposits in the account being lowered by a considerable degree. This was noted in the first quarterly report on the Fund.
A detailed overview of the performance of the Fund
The document, which was seen by Kaieteur News, notes that the Federal Reserve Bank lowered interest rates twice in the first quarter from a range of 1.50% – 1.75% to 1% – 1.25% and then again to a drastic 0% – 0.25%.
As of March 2020, the Natural Resource Fund capital stood at $11.5B while the profit comprising of interest earned on deposits stood at $1.6M. This represented a return of 0.014% during the quarter. In March, Finance Minister Winston Jordan had disclosed to this news agency that Guyana had received almost US$55M for the first million barrels of oil which was sold to Bahamas-based Shell Western Supply Trading Limited (SWSTL). The report figures cover that amount.
Earlier this month, the nation received another US$35M from Shell for the second list of one million barrels of oil from the Stabroek Block. A third lift is expected soon. Energy Department Head, Dr. Mark Bynoe, had told this newspaper in a previous interview that Guyana is entitled to at least five million barrels of oil for 2020.
According to the Energy Department, the subsidiary of Shell, which is the third-largest company in the world based on 2018 revenues, won the bid for three lifts on account of a number of factors, including Shell’s willingness to share critical refinery information which it asserts Guyana needs, in order to understand the Liza crude behaviour.
Kaieteur News was also informed via a statement from the department that Shell’s readiness to support it in operating these cargoes, while it is strengthening its structures and in-house crude commercialization human resources, was also a determining factor.
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