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Govt. pumps US$100M into banking system to address foreign exchange shortage
Kaieteur News- Government has injected a further US$100M into the banking system to address foreign currency shortages, the Ministry of Finance said on Monday.
According to the ministry, Vice-President Bharrat Jagdeo and Finance Minister Dr. Ashni Singh, along with Central Bank Governor Dr. Gobind Ganga, on Monday afternoon met with the Chief Executive Officers and other representatives of commercial banks to discuss recent developments in the banking system specifically in relation to the market for foreign exchange.
Vice-President Bharrat Jagdeo and Finance Minister Dr. Ashni Singh, along with Central Bank Governor Dr. Gobind Ganga on Monday met with the Chief Executive Officers and other representatives of commercial banks
At the meeting, note was taken of the continued availability of adequate levels of foreign currency in the financial system as a whole to meet ongoing demand, despite occasional timing differences. “These timing differences have resulted in some delays being encountered in the settlement of orders for foreign currency from time to time at some commercial banks,” the ministry’s statement said.
According to the ministry in order to ensure that pending requests for foreign currency are met in a timely manner, the decision was taken that a sum of US$100 million will be injected into the market with immediate effect and distributed across all commercial banks. “This injection will provide immediate relief to the system in meeting pending demand for foreign currency, while the temporary timing mismatches unwind themselves. Meanwhile, the Government remains closely engaged with the private sector including the commercial banks in the interest of ensuring that the market continues to function efficiently,” the statement concluded.
Just over a week ago Jagdeo had announced that the Bank of Guyana had injected another US$35M into the local banking system to address foreign currency shortage in Guyana. At his press conference on March 27, 2025, he said that intervention was the second time in nine months that the government was forced to inject millions of US dollars to smooth out the market. Last year June, the government said it injected US$80M to stabilise the market. “We study the market, we study the balance that is in all the banks and we only address mismatch between revenue flow of currency and demand for currency,” Jagdeo had told the news conference. He added, “As I said before we have the capability of putting as much foreign currency into the banking system as is needed to meet legitimate demands.”
However, according to the Vice President, while his government can pump foreign currency in the local market, it will do so in a measured way. “…because we don’t want to cause an appreciation of the currency if you put too much money at once you cause an appreciation of the currency and that could ultimately lead to the Dutch disease, it’s bad for the agriculture sector, it’s bad for manufacturing’, Jagdeo said.
Only recently businessmen complained that the shortage is causing disruption in their trade and has resulted in goods to be exported being spoilt. They called on the government and local banking system to come clean and say “what is really going on with the availability of foreign currency in Guyana”. The businessmen who spoke to this newspaper had also claimed that despite the injection of millions by the government previously, it had done nothing to alleviate the shortage of foreign currency in the country.
(Govt. pumps US$100M into banking system to address foreign exchange shortage)
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