In a strategic move to stabilize the local currency market, the Bank of Guyana injected US$35 million into the banking system on Thursday. The announcement was made by Vice President and General Secretary of the People’s Progressive Party (PPP), Dr. Bharrat Jagdeo, during his weekly press conference.
The intervention comes amid growing concerns over a persistent shortage of foreign currency, which has been disrupting businesses and trade. Many business owners have reported delays in accessing foreign exchange for international transactions, causing significant setbacks, particularly for importers of perishable goods.
Dr. Jagdeo explained that the Central Bank closely monitors the market to address mismatches between the flow of currency and demand. “We only intervene to smooth out imbalances,” he stated, emphasizing that such actions are carefully timed to prevent excessive currency appreciation.
He warned that flooding the market with foreign currency could lead to negative economic consequences, including what is known as “Dutch disease.” This phenomenon occurs when an overvalued currency harms export-driven sectors like agriculture and manufacturing. “If you put too much money in at once, you cause an appreciation of the currency, which is bad for agriculture and manufacturing,” Jagdeo noted.
This latest injection follows a similar intervention in June 2024, when US$80 million was released to address similar issues. Despite these measures, some business owners have expressed frustration, claiming that the shortages persist and continue to impact their operations.
The Central Bank’s most recent exchange rate update lists the buying price for USD at $207.98 and the selling price at $210.45. Other currencies, such as the Canadian dollar and Euro, also saw stable rates amid the intervention.
As businesses await further improvements in foreign currency availability, the government has reiterated its commitment to monitoring the banking sector and taking action when necessary to ensure economic stability. For now, this injection serves as a critical step in addressing ongoing challenges faced by Guyana’s financial system.
