Central Bank will intervene in foreign currency shortage issue, if necessary

Central Bank will intervene in foreign currency shortage issue, if necessary – GCCI

Jan 20, 2017 News

– Meanwhile rates at city cambios increase
Central Bank is currently monitoring the matter of a foreign currency shortage in Guyana

The selling price for US currency has moved up to $215 at many City cambios.

and will intervene if necessary.
This is according to a statement from the Georgetown Chamber of Commerce and Industry (GCCI).
According to the Chamber, its Executive Management Committee (EMC) met with senior representatives of the Bank of Guyana on Monday to discuss concerns raised by some of its members regarding difficulties with local banks processing overseas transactions.
During the meeting, the Chamber said that both parties shared their views on the matter, especially as it relates to conflicting reports that were seen in the media. Nonetheless, the Bank of Guyana assured the Chamber that there is no shortage of foreign currency and produced evidence which suggests that the foreign reserves of the commercial banks and the central bank remain relatively unchanged.
The Chamber further disclosed that the Bank of Guyana stated that information being circulated by the media is “destabilizing speculation” which can impact demand, but added that it is monitoring the situation and will intervene if necessary.
Based on discussions with the Bank of Guyana, the Chamber recommended that businesses consider the option of looking to other banks and cambios for foreign currency. GCCI said that any difficulties faced when processing financial transactions can be reported to the Chamber or the Bank of Guyana directly.
In the meantime, businessmen continue to be told that there is a shortage in the system. In other cases, some companies are being informed that if they want their transaction to be conducted, then transfers in US dollars would be done at a rate of G$214. In this regard, the rates at some cambios have also increased from $208 to $215. 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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