‘Govt closely monitoring foreign currency market’

Nov 01, 2024 News

—Jagdeo says Central Bank can intervene when necessary

Vice President, Bharrat Jagdeo (‘Govt closely monitoring foreign currency market’)

Kaieteur News- Amid continuous concerns from the public about the constant climbing of the exchange rate at cambios with the US dollar, Vice President Bharrat Jagdeo told reporters that the government is closely monitoring the foreign currency market and the Central Bank is on standby to intervene as soon as the situation escalates.

Jagdeo was asked to comment on the situation of the rising rates and he said, “So I explained here about the foreign currency market and I said that we are carefully monitoring the market. So the idea is not to have the rate appreciate too much because of the same Dutch Disease phenomenon nor do we want it to depreciate significantly.”

Over the last few years there has been the trend of the exchange rate fluctuation between $212 to $222 and then it reduces once there is an injection of foreign currency into the market, “we believe that the flow of foreign currency in aggregate sense is matching the demand in aggregate sense, but you have a balkanized market and that’s what we try to help with from time to time,” the VP explained.

He said given the number of activities being funded in the country, capital works and the constant expansion of the country’s economy encourage a greater demand for foreign currency to have transactions done. The last time the Central Bank had to intervene to stabilise the market. Jagdeo had met with the bankers and US $100M was injected into the system.

The current foreign currency reserves would allow future interventions at any time once an assessment of the market shows that the aggregate demand is exceeding aggregate supply, Jagdeo a former president said. “I have had the people looking at the market and if there is necessity particularly as we come up we have seen some increase in demand… So the increased demand for the procurement for Christmas, a lot of people are now buying goods for Christmas so they have to make payments now, so maybe there is time to look at even out the market,” Jagdeo said.

Furthermore, he said “…The Central Bank if you have an oversupply in December we can even buy back from the market because that’s how the Central Bank works, through either open market operations or buying and selling foreign currency to smoothen out the flow. I can assure you we are watching it carefully,” the VP explained.

In April of this year this publication reported that despite numerous complaints of long waiting time at local banks to have access to foreign currency, Jagdeo had said that there is currently no sustained shortage of the US dollar in Guyana, and his government has seen nothing to indicate such.

He said then that the administration receives daily reports from the Central Bank and no shortage had been reported. At his Thursday April 4^th press conference at Freedom House, the VP was asked by Kaieteur News to comment on the US dollar going scarce and the exchange rate rising over GYD$220. He said that, “The moment we believe that there is a sustained shortage… because we get daily reports from the central bank on these matters. If we believe there is a sustained shortage then we can inject large amounts. We have the capacity to do that. That’s what central banks are for…to smooth out markets and we wouldn’t hesitate to use the Central Bank to smooth out the market.”

(‘Govt closely monitoring foreign currency market’)

cambio, foreign currency, Guyana, Jagdeo

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