BoG should help to foster economic growth
November rains are here already with widespread flooding again, same old, same old! As a teenager in the 70’s I always admired the big blue and tallest building in Georgetown off Water Street, the Bank of Guyana. Back then their air conditioning served as a quick respite from our humidity, Guyana had limited A/C then, so the experience was memorable.
The Bank of Guyana has failed this nation over the decades and now. I will not attempt to recreate history but deal with the current deficiencies. They have had some good accomplishments, but in sum the leadership of the Bank of Guyana is substantially responsible for the level of unemployment and poverty in our Nation.
No one speaks about it because Economics and Finance are not glorious subjects here!
The Bank of Guyana is responsible for the monetary policy of our nation, inflation management, banking and insurance regulations, money supply, interest rates and several tools. Yes, the rate you pay to buy a house, and car is driven by the BoG. And the prices you pay at our markets “La Penitence”, “Bourda”, “Stabroek”, “Mon Repos”, etc. unknown to you are driven by the actions of the Bank of Guyana, since we all react to a theory called rational expectations. As we come upon the holiday season you will see the annual rise in prices and shortage of currency. The Bank of Guyana reacts versus being proactive.
These are things that should be done:
1. Create a Guyanese intermediary Bank managed by the Bank of Guyana to collateralize (buy and guarantee) mortgages from our local banks and sell to international investors and banks as pools. Mr. Vice President this is your solution, no need to go looking for investors. This will replenish the money supply. Mortgages become cheaper and widely available for the 50k planned house lots (houses) more importantly build homes and employ a substantial part of the unemployed. Why wait for a Government rebate! Yes, it will require some automated system improvements!
2. Recognize we have an artificial exchange rate – where seepage is occurring, and most Guyanese will