In a bid to tackle the ongoing foreign currency shortage in Guyana, Vice President Bharrat Jagdeo announced on Thursday that the Bank of Guyana has injected an additional US$35 million into the local banking system. This intervention marks the second time in nine months that the government has taken such measures to stabilize the currency market.
Jagdeo’s announcement came during his weekly press conference, where he acknowledged the challenges faced by businesses due to the scarcity of foreign currency. He noted that last June, the government had previously injected US$80 million into the market to manage similar issues. “We study the market and the balance within all banks, addressing the mismatch between revenue flow of currency and demand for currency,” Jagdeo explained.
However, the Vice President cautioned that while the government has the capacity to inject as much foreign currency as needed, it must do so judiciously. “We don’t want to cause an appreciation of the currency. If too much money is introduced at once, it can lead to Dutch disease, adversely affecting sectors like agriculture and manufacturing,” he emphasized.
The recent US$35 million injection comes in response to mounting complaints from business owners who have expressed frustration over the disruptions caused by the currency shortage. Many have reported that they are facing significant challenges in conducting trade, with some goods perishing due to delays in securing foreign currency for imports.
One such business, Double ‘D’ Trading and Distribution Limited, has been vocal about the hardships it faces due to the foreign currency unavailability. The owner reported that their imports of perishables, mainly onions and potatoes, have been held up for over three weeks, leading to financial losses as goods spoil while awaiting clearance. “I had to dump millions of dollars,” the owner lamented, calling on both the banking sector and the government to provide clarity on the ongoing situation. “It is not good for investment,” they added.
As the government continues to navigate this complex issue, the need for transparency and effective communication surrounding foreign currency availability remains critical for fostering a stable economic environment in Guyana. The ongoing challenges underscore the importance of addressing both immediate concerns and long-term strategies for sustainable economic growth.
