No Gov’t control on foreign exchange- Minister Jordan

GINA, Guyana, Friday, March 3, 2017

The Government has not set any rates for foreign exchange, Finance Minister Winston Jordan, said on Thursday.  The exchange rate for Guyana is freely determined as the market forces dictate, the Finance Minister explained.

Jordan was at the time speaking at a press conference he hosted at the Ministry of Finance. He was accompanied by the Governor of the Bank of Guyana, Dr. Gobind Ganga and the Guyana Revenue Authority’s Director General, Godfrey Statia.

Minister Jordan said, “You can buy US at $250 (Gy for US $1) if you want and sell at $253. It is just the spread. We are not setting the rate. You could buy at any rate you want, but what we are saying, to sell it back, you must only make a profit of US$3 maximum. I don’t see how that could be rate setting essentially. It would be gouging if you bought at $199 (Gy for US$1) and expect to sell at $240 and $250.”

This comes after several media reports described as speculative by the Minister and other top Financial Sector Officials about foreign currency being hoarded as a result of a shortage or restricted supply.

Adding support to the Finance Minister, Dr. Ganga, explained that over the last two months foreign exchange interactions have been on the increase. “In January, sales were US$95.1M. Up to February 18, it was US$164.6M, so you would have seen a significant increase over the month of January, with respect to purchases and sales up to February.”

It was reported that Non-Bank Cambios recorded purchases of US$3.2 M and US $2.4M in January and February respectively. Sales for the same period amounted to US$5.6M and US$6.3M respectively. Dr. Ganga recalled that the spread between selling and purchasing prices for foreign exchange averaged US 1.64 during 2016, for Non-Bank Cambios. This spread has been almost doubled to US$3.

The Bank of Guyana Governor recalled, “Someone was saying because of the spread, they were unable to say the same level of business. I can’t see how the spread would have affected the purchases, I’m seeing.”

The official reiterated that all that the officially recognised Cambios and Banking facilities are doing is to ensure that there is enough foreign exchange available to fulfill demand. Government is moving simultaneously to ensure that the foreign exchange reserve is protected and secured for local usage by legitimate people, Dr. Ganga emphasised.

This issue of whether there is enough foreign exchange on the local financial market was questioned in a series of articles by some sections of the media. The recent disclosure about the amount of foreign exchange in circulation is further proof the Government officials state, of the soundness of the financial sector, and testimony to the stability and supplies of foreign exchange currency available locally.

 

By: Paul McAdam