GGCI flays Central Bank over foreign currency shortage

Mar 03, 2023 News

…bank says chamber ignorant about what influences availability and pricing of foreign currency

Kaieteur New – Amid a deepening shortage of foreign currency in Guyana, the Georgetown Chamber of Commerce and Industry (GCCI) said it is dissatisfied with the Bank of Guyana’s (BOG) lack of action, vision and modern financial policies to improve access to financing for local businesses.

But the Central Bank said the GCCI’s energies would be better spent engaging either the banks or the bankers association, who are also members of the private sector, with a view to better understanding the factors that influence the availability and pricing of foreign currency in the domestic market.

Bank of Guyana

In a sharp statement issued on Thursday the GCCI said the country’s economy is one of the fastest-growing in the world, with oil revenues generating hundreds of millions of US dollars annually. The business body said according to its own statistics, the Bank of Guyana has failed to intervene in the ongoing foreign currency shortage issue, despite the Private Sector complaining of a lack of US dollars since 2019.

“Therefore, the Chamber views the Central Bank’s inaction to activate mitigating strategies to address the foreign currency situation as a disregard for business. The GCCI will continue to advocate this cause in hopes that a thorough, independent investigation is conducted in order to uncover the root cause. An independent intervention is needed since the GCCI has lost confidence in the leadership of the Bank of Guyana or its capacity to implement policies that will guide Guyana’s financial sector to support growth being experienced in the real sector,” the statement read.

Meanwhile, in a sharp response the Bank of Guyana (BoG) said it is an independent central bank with a clear mandate defined by law and in keeping with international norms and standards for central banking. “Its objectives include fostering domestic price stability through the promotion of stable credit and exchange conditions. The law establishing the BoG also stipulates that the Guyana Dollar is a freely floating currency, traded in a market whose prices are determined by prevailing market conditions, that is to say demand and supply.” The bank said the GCCI appears to be of the mistaken impression that the BoG exists to ensure that foreign currency is available to their membership at the times that they demand and at prices that they demand. “This is simply not how an open market economy operates, and is simply not how foreign currency availability and pricing are determined where floating currencies are concerned. The GCCI’s energies would be better spent engaging either the banks or the bankers association, who are also members of the private sector, with a view to better understanding the factors that influence the availability and pricing of foreign currency in the domestic market. The BoG remains committed to discharging its mandate and to engaging with the private sector on matters of concern to them in a mutually respectful manner.”

• Bank of Guyana's (BOG), currency, flays, Georgetown Chamber of Commerce and Industry (GCCI), shortage