Banks unwilling to transfer US$8.4M to Venezuela

Jun 10, 2018 News

…money pushes up country’s public debt

By Kiana Wilburg
As at December 31, 2017, Guyana’s public debt amounted to US$1,670.7M. According to Finance Minister, Winston Jordan, in his End of Year report, this is US$8.4M higher than projected at the time of presenting budget 2018.

Finance Minister, Winston Jordan

The Finance Minister explained that this marginal increase was primarily due to higher disbursements from the Export-Import Bank of China, Inter-American Development Bank (IDB) and CARICOM Development Fund (CDF). Also contributing to this situation is the delayed debt service payments to Venezuela.
Jordan said that this is due to sanctions imposed by the United States on debt and securities transactions related to the Spanish speaking country. As a result of those sanctions, Jordan said that Guyana’s international correspondent banks have been unwilling to transfer payments to Venezuela.
In the circumstance, Jordan said that earlier this year, the Government opened an account with Bank of Guyana where the payments due to Venezuela are being posted.
Furthermore, the Finance Minister said that for 2017, the total public debt-to-GDP ratio increased marginally to 46.1 percent from the projected 2017 figure of 45.2 percent at the time of the budget 2018.
As at December 31, 2017, the Minister said that the external public debt stock stood at US$1,240.6M, marginally higher than the projected 2017 amount of US$1,234.5. He said that the share of external public debt accounted for 74.3 percent of the total public debt stock as at December 31, 2017.
On the domestic side, the Finance Minister noted that the domestic public debt stock was US$430.1M as at December 31, 2017, marginally higher by US$2.3M than the projection at budget 2018. Jordan said that this was primarily due to the issuance of a new 91-day Treasury bill.
He noted that the share of domestic public debt accounted for 25.7 percent of the total public debt stock as at December 31, 2017.
The Finance Minister also noted that at the end of last year, the total public debt service amounted to US$71.7M which was marginally lower (2.5 percent) than the projected 2017 figure of US$73.5M.
Giving a further breakdown, the Finance Minister said that external public debt service for 2017 amounted to US$60.8M which is US$1.9M less than projected at the time of budget 2018. For 2017, the economist said that 6.8 percent of total revenue earned, went towards servicing the external debt, marginally increasing from the 6.7 percent that was projected at the time of the presentation of the 2018 budget. He said that domestic debt service payments for 2017, which amounted to US$10.9 M, remained the same as projected.

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