Finance Minister, businessmen differ on foreign exchange availability

Last Updated on Monday, 13 March 2017, 11:38 by Denis Chabrol

FLASH BACK: Finance Minister, Winston Jordan and Governor of the Bank of Guyana, Dr. Gobind Ganga speaking on the balcony of Parliament Building.

Finance Minister, Winston Jordan on Monday maintained that sufficient foreign exchange is available, although businessmen continue to complain that they cannot readily make overseas payments by draft or wire transfer for supplies.

“I have heard that complaint and every time I hear that complaint the Governor (of the Bank of Guyana,  Dr, Gobin Ganga) has assured me that he doesn’t know anything about that because the banks haven’t approached him for foreign exchange to meet these and a number of these importers are going to various banks and putting in their claims so at any one time you have clean it out, sanitize the list before you understand what is the true demand for foreign exchange,”  Jordan said on the privately-owned  FM radio station, HJ 94.1 FM.

A leading City businessman, who has to import supplies on a weekly basis, told Demerara Waves Online News that only last week Friday he was forced to buy Canadian dollars to send to his United States-based supplier, resulting in the effective buying rate being GYD$234 for US$1.00. The Finance Minister also believed that some business-owner’s utterances about foreign exchange earnings are contrived to match similar views being expressed by the political opposition. Demerara Waves Online News also personally checked at a foreign-owned commercial bank and was told that cash was available over the counter readily, but one has to join a waiting list to wire transfer funds overseas.

Jordan said Guyana’s foreign exchange reserves currently stand at about GYD$600 million, and the exchange rate has depreciated and stabilized at about US$1.00 = GYD$215, a movement by about GYD$10.00. “More and more people are reporting that as they go to the banks they are getting foreign exchange although not large sums,”  he said. Jordan added that commercial banks have been enforcing the rule that says foreign exchange buyers must show the reason for monies needed, allowing the banks to verify that information and if the banks have they will contact the buyer.

The Finance Minister said in addition to drastically reduced foreign exchange earnings from rice, sugar and forestry, he said some gold exporters are violating the law by failing to declare all their earnings to a commercial bank.

“The economy- right now the thing that is generating foreign exchange is gold. You have a couple of big gold dealers who will sell the gold overseas. You have some issues with them declaring the entire amount that they get overseas,” he said. Jordan said the Central Bank Governor has been using moral  persuasion instead of enforcing the law.

The Finance Minister reiterated that the commercial banks and Central Bank have sufficient foreign exchange to meet demands.  “A number of areas where you have had foreign exchange coming in to bolster the system is not there so despite that, though, the holdings of foreign exchange in the commercial banks have not reduce dramatically neither has the holding  of foreign exchange in the Central Bank,”

Demerara Waves Online News has been told that at least one diplomatic mission is calculating the exchange rate by as much as GYD$215.

Earlier this year, the Bank of Guyana stopped buying Trinidad and Tobago, and Barbados dollars after  authorities had found out that persons had been travelling from those countries to sell their currencies and buy American dollars from commercial banks and Cambios.

The Bank of Guyana also subsequently ordered that there be a three Guyana dollar spread between the buying and selling and buying rates of GYD$210 — GYD$213 to the US dollar.  However, some foreign exchange traders have been buying US$100 dollar bills for as much US$215 for US$1.00