Stricter monitoring to address foreign currency fluctuations

Georgetown, GINA, Thursday, February 2, 2017

The unease in the local economy about the availability of foreign currency has resulted in the Bank of Guyana instituting stricter monitoring measures. This was announced by Minister of State, Joseph Harmon, at the weekly Post- Cabinet Media briefing at the Ministry of the Presidency, today.

The Minister informed the media that at the Cabinet meeting of January 21, Minister of Finance, Winston Jordan, informed his colleagues that while there was no shortage as alluded to in some media reports, there was, “disequilibrium which had occurred in the foreign exchange market.”

Harmon said cabinet was informed that the Bank of Guyana as the regulatory body for “Bank and Non- Bank Cambios” took the decisions to ensure stricter monitoring of regulations and the foreign exchange market. As a result of these decisions, the Bank of Guyana will issue a number of guidelines with regards to the new regulations and monitoring.

The guidelines will ensure that exporters repatriate their export earnings to the banking system as required, conduct close monitoring and examination to maintain orderly behavior and stability and ensure that all foreign loans and grants are issued and disbursed on time. The latter, the Minister explained, will ensure increased flows of foreign currency locally. This will see the Bank of Guyana strengthening its capacity to ensure that regulations are followed by all financial institutions.

The Minister of State note that some companies are sending large amounts of foreign currency abroad, a move which will result in sanctions being taken against them as this is contrary to local banking regulations.

Declining to name the company, Harmon revealed that an overseas based company, operating locally, has remitted more than US$100M to its foreign accounts. He said action will be taken against the company.

Harmon said there are similar issues in several regional countries including Suriname, Trinidad, Barbados, Brazil, Venezuela and Jamaica. “Once they find there is some spot where they can access it, they will zero in on it. The Bank of Guyana will tighten up on that,” Harmon said.

Over the last few weeks there have been reports that several banks have reported less availability of foreign currency. This has resulted in increased demands from many business owners and companies, despite assurances from Finance Minister Jordan and the Bank of Guyana’s Governor, that there is enough foreign currency in the system to satisfy the usual demands made at this time.

 

By: Paul McAdam