Bank of Guyana, GCCI clash over ‘shortage’ of foreign currency

The Bank of Guyana (BoG) on Thursday said issues relating to an alleged shortage of foreign currency on the local market should be raised with the commercial banks or the Guyana Association of Bankers. The BoG was responding to a statement from the Georgetown Chamber of Commerce and Industry (GCCI).

The GCCI said in a statement on Thursday that the BoG “has failed to intervene in the ongoing foreign currency shortage issue, despite the Private Sector complaining of a lack of US dollars since 2019.” It lambasted the BoG for the lack of action, vision and modern financial policies to improve access to financing for local businesses while the economy continues to grow at a fast rate.

The Chamber is calling for a “thorough, independent investigation” to uncover the root cause of the problem and an independent intervention, noting that it 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 Central Bank in response noted 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 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 bank said.

As such, it noted that the Chamber’s energies would be better spent engaging either the banks or the bankers association, who are also members of the private sector, to better understand the factors that influence the availability and pricing of foreign currency in the domestic market.

The BoG said it remains committed to discharging its mandate and to engaging with the private sector on matters of concern to them in a mutually respectful manner.