Foreign currency situation is under control and will return to normalcy

Foreign currency situation is under control and will return to normalcy – GCCI Head

Jan 19, 2017 News

It appears that the situation of the shortage of foreign currency at local banks will soon be

GCCI Head, Vishnu Doerga

alleviated. At least, this was the promise given to members of the Private Sector Commission and the Georgetown Chamber of Commerce and Industry (GCCI) during a meeting with the Banking Association.
According to GCCI Head, Vishnu Doerga, he has every confidence that the matter is “under control and will return to normalcy.”
Doerga had said the situation is one which hampers the private sector logistics, since businesses are unable to pay suppliers in a timely manner, thereby delaying shipments. He said that the scarcity also leads to the exchange rates being increased.
In the meantime, businessmen continue to be told that there is a shortage in the system. In other cases, some companies are being told that if they want their transaction to be conducted, then transfers in US dollars would be done at a rate of G$214. There is a concern that the “shortage” is responsible for the hike in the rate for the US currency by local banks.
For the time being, Central Bank Governor, Dr. Gobind Ganga, insists that the banks have foreign currency.
“I don’t know what they are going on with. There is no shortage. All the banks have money. What is happening is that some of them are just holding on to their money. The foreign currency situation has even improved significantly from last year to now!”
Another senior banking official at the Central Bank asserted, “All the banks can provide foreign currency to the consumers, but they are trying to be difficult. Some of them are keeping the money so they can send it to their other branches in the region.”
In addition, Dr. Ganga stressed that there was no reason for concern.
“There is no foreign currency crisis looming in Guyana. The fact is, we have a net supply of foreign currency in the system, so there should be no depreciation of the currency by any significant amount. It is not a situation where there is a piling up of demand for foreign exchange at the commercial banks,” Dr. Ganga said.
He even provided details which illustrate that the current foreign exchange reserves held by the Bank of Guyana and the commercial banks were in excess of the 2015 figures.
“Commercial banks have increased their foreign exchange holdings. In 2015 they had a gross holding of US$357M. As of September 2016 it was US$388.4M, and we were expecting the commercial banks to hold approximately US$403M by the end of the year,” Dr. Ganga revealed.
“The (commercial) banks have money… and they have quite a lot. It is not a small amount. The Bank of Guyana had US$598M at the end of 2015, currently we are holding close to US$625M which is much more than last year. You can see, therefore, that there is an increase in foreign exchange availability from the holdings,” Dr. Ganga disclosed.

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