Latest update April 23rd, 2024 12:59 AM
Jun 02, 2014 News
Cambio owners are now extremely worried that their business which had enjoyed several years of sustainable growth may now be heading for a serious plunge following the recently issued advisory by the Caribbean Financial Action Task Force (CFATF).
CFATF in its advisory called on its members to consider implementing further counter measures to protect their financial systems from the ongoing money laundering and terrorist financing risks emanating from Guyana.
Failure to pass the legislation, the Anti Money Laundering and Countering the Financing of Terrorism Bill, on required deadlines, has left the regional body with no choice but to refer Guyana to its parent body, the Financial Action Task Force, which can see Guyana being possibly blacklisted on the international level.
Several owners of cambios in and around Georgetown have said that they are worried about the implications the advisory will now have on the exchange rate.
“At first we saw fluctuations in the exchange rate but now with this issue by the regional body, I believe that the exchange rates will increase to an absurd level and we would have no choice but to do what is in our interest in this regard,” one cambio operator told Kaieteur News.
“How central bank will deal with this is left to be seen. I am worried. All my life I have been into the cambio business and I know this situation will increase the hoarding of the foreign currency.”
“The central bank and the financial intelligence unit have been keeping us up to date on measures we need to take to safe guard ourselves when it comes to Anti Money Laundering and Countering the Financing of Terrorism. But central bank is not telling us whether they have enough money to cushion the effects this advisory will have on the cambios until things regularize. At least we hope things regularize. Suppose things get worse when Guyana goes before the International body? What will central Bank do then? Is it waiting until Guyana goes before the body before we put things in place? My livelihood is under threat.”
A representative of Sookraj Cambio said: “Not much can be done to stop the increase in the foreign exchange rates. It will go up. We are worried about this because it will affect our livelihoods. We have families too and it will trickle down to the rest of the country.”
In a brief interview, Deputy Governor of the Bank of Guyana, Dr. Gobind Ganga said that Central Bank is also worried about the implications for the financial landscape and how it will pose certain challenges to the banking system.
“It will have adverse effects for us and it will trickle down to other aspects of the economy. It will also threaten our relationship with other regional lending institutions. We have certain in-house measures that we plan to take but I wish not to get into that.”
The Central Bank Deputy had previously stated that the Bank had a sufficient amount of foreign currency to maintain the status quo of the financial landscape, but this was before the advisory by the Caribbean Financial Action Task Force was issued. Cambios are worried as to what will happen when this “back-up” or “last resort” is exhausted.
Dr. Ganga said that this question will be answered at a later date.
During a brief interview with media operatives recently Minister of Finance Dr. Ashni Singh said that this was the inevitable consequence of the Opposition’s refusal to enact the CFATF-compliant Bill and the responsibility for the CFATF advisory lies squarely at the feet of the Opposition. The political Opposition has however, refused to accept responsibility for the action taken. It has blamed the government instead.
When questioned as to what mechanisms the government plans to put in place to cushion the effects of the blacklisting status on foreign exchange rates, Dr. Singh said that government’s instruments to address this are finite. He articulated that he wished not to speculate about the possible effects that the foreign exchange rate will suffer.
He said that the advisory inflicts severe and immediate damage to the credibility and international standing of our country.
“The statement called on the community to exercise greater due diligence when conducting transactions with Guyana and so the dismissal of the legislation by the Opposition is nothing short of being irresponsible… It remains to be seen what will happen from now.”
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