Gov’t still focussed on addressing foreign exchange access - President

Still focussed on addressing the complaints by businesses about access to foreign exchange from the banking system, President Irfaan Ali says that his government is “not sitting” on the issue.

He assured business operators that government is working with the necessary people to address the reported shortage at some commercial banks.

Utilising data he had at hand, the President on Saturday stated that banks have been cooperating with the new requirement for daily reporting of foreign currency usage. He pointed out as of Friday, Republic Bank had the highest demand for foreign currency, with Visa debit and credit card transactions requiring 15 per cent of the total demand. The Head of State explained that debit and credit card transactions across the banking sector only demand five per cent of the foreign exchange.

“We are not sitting on this issue, we understand that the demand for business and transactions is increasing so we are working on many different fronts right now to address this issue,” Ali emphasised.

The president had taken a moment to address the issue during his address at the opening of a distribution facility commissioned by Suri Trading on the East Bank of Demerara.

Chairman of the Private Sector Commission, Paul Cheong who first touched on the issue during the ceremony said that they must work to eliminate hindrances in the inter-bank system.

He asserted that the problem is not a shortage but distribution of foreign currency among the banks. “We are working with the suppliers and bankers to ensure that there is more efficient distribution in the system,” Cheong stated.

In February, business operators complained bitterly of not having access to foreign currency to facilitate transactions.

In an effort to address the issue, the Guyana Association of Bankers Inc (GABI) through an invitation from the Private Sector Commission (PSC) met with the Bank of Guyana on March 6 to discuss the prevailing foreign exchange situation.

But while businessmen applied pressure, Vice President Bharrat Jagdeo was the first from the government to announce a daily reporting system for banks on their closing foreign exchange holdings.

Days later the Bank of Guyana (BoG) issued a circular to bank cambios informing of its intention to crack down on shadowy transactions.

Bank cambios will now have to submit invoices against which foreign currency is sold to the Guyana Revenue Authority (GRA).

The updated guideline on bank cambio operations states that the “Bank of Guyana is taking a number of measures to address the current Foreign Exchange situation. One area of concern is the importation of goods which requires a valid import invoice as set out in Bank of Guyana Circular No.05/2017.

“The Bank is now requesting all bank cambios to submit invoices against which foreign currency is sold to the Commissioner General, Guyana Revenue Authority for the attention of The Head of the Customs Department,”

Well-placed sources say that it is felt that this guideline will expose shady operations that are accessing foreign exchange for other than the stated purpose. The updated guideline is part of inter-agency work between the BoG and the GRA and is also seen as enabling checks and balances.

While businessmen have complained about availability, BoG Governor, Gobind Ganga, has asserted that there is sufficient foreign currency within the banking system.

GABI stated that a number of issues were identified and all parties agreed to work constructively to resolve them.

“GABI and its members are committed to collaborating with all stakeholders to ensure that every aspect of the financial industry, including the foreign exchange market, remains stable and efficient”, the statement said.

The PSC in its own statement that day noted that it was agreed that there is no overall shortage of foreign currency in Guyana despite there being a shortage at some banks. Nonetheless, the Commis-sion committed to working with GABI and the BoG to address the issues raised and promised to collaborate and work together for the benefit of all concerned.