GEORGETOWN, Guyana – The Bank of Guyana (BoG) has hit back at the Georgetown Chamber of Commerce and Industry (GCCI) for trying to put the blame for the current US currency shortage at the feet of the country’s central bank.
The BoG made it clear that it was not responsible for ensuring GCCI members had foreign exchange whenever they wanted it, and advised the private sector body to redirect their attention.
In a clear-the-air statement on Thursday, it said the GCCI was mistaken in thinking that the central bank was mandated to make sure that foreign currency is “available to their membership at the times that they demand and at prices that they demand”.
The GCCI had expressed dissatisfaction with the central bank’s handling of the US dollar currency shortage affecting the country.
It said in a statement on Wednesday that the BoG had displayed a “lack of action, vision and modern financial policies to improve access to financing for local businesses”.
“The country’s economy is one of the fastest-growing in the world, with oil revenues generating hundreds of millions of US dollars annually. According to its own statistics, the Bank of Guyana has failed to intervene in the ongoing foreign currency shortage issue, despite the private sector complaining of a lack of US dollars since 2019. Therefore, the Chamber views the Central Bank’s inaction to activate mitigating strategies to address the foreign currency situation as a disregard for business,” it added.
However, the BoG sought to set the record straight about its role as a central bank.
It pointed out that its objectives include fostering domestic price stability through the promotion of stable credit and exchange conditions.
Additionally, it said, the law establishing the BoG also stipulates 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 BoG said.
“The GCCI’s energies would be better spent engaging either the banks or the bankers association, who are also members of the private sector, with a view to better understanding the factors that influence the availability and pricing of foreign currency in the domestic market,”
The BoG added that 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.