Gov’t strategically intervenes in foreign currency to prevent Dutch disease – Dr Jagdeo

-BoG injects US$35M into banking sector to stabilise market

Vice President and General Secretary of the People’s Progressive Party (PPP), Dr Bharrat Jagdeo says the government is aware of concerns about foreign currency shortages but is intervening strategically to balance supply and demand.

Dr Jagdeo addressed the management of the foreign currency market during a press conference on Thursday, in response to a Kaieteur News article published recently.

He told reporters that the central bank monitors the market and injects foreign currency when necessary to address mismatches in flow and demand. In fact, the Bank of Guyana has taken decisive action to inject US$35 million into the local banking sector.

“As I said before, we have the capability of putting as much foreign currency into the banking system as is needed…to meet legitimate demand,” Dr Jagdeo said.

However, he said these interventions must be done strategically to prevent excessive currency appreciation, which could harm agriculture and manufacturing and lead to economic issues like the Dutch disease.

“If you put too much money in at once, you cause can appreciation of the currency …that could ultimately lead to the Dutch disease; that is what is considered,” he elaborated further.

In the latest exchange rate update provided by the Central Bank, the buying price for USD stands at $207.98, with a selling price of $210.45.

Additionally, the buying and selling prices for Canadian dollars are listed at $145.67 and $147.36 respectively. EURO’s exchange rate is reported at a buying price of $225.01 and a selling price of $227.9.