Despite assurances from the Central Bank that there is enough foreign currency at the local banks to service domestic needs, the issue of foreign currency shortage has raised its ugly head once again.
This time, it is Opposition Leader, Bharrat Jagdeo, who is claiming that there is more to the story that Central Bank is letting in on.
Earlier this week, complaints surfaced in the local media that a shipping company was charging clients as much as GY$230 to US$1. The company’s reason for this is that there is a shortage of foreign currency.
Central Bank, however, vehemently denied this and even said that at the financial institutions, the buying and selling rates are cheaper.
Speaking at his weekly press conference held earlier today, Jagdeo said, “Everyone knows that out there in the market for notes, you have to pay at least GY$230 to US$1. There is an argument from Central Bank that there is no shortage of foreign currency because you can go to the banks for transfer and get the money at a much lower rate.”
The Opposition Leader continued, “But what we are not being told is that the only reason the rate is lower there is because of a government circular which has forced the banks (to do so). They cannot buy beyond GY$215 and they cannot sell at more than GY$216.50. So they have limited the spread. It is only through an executive fiat which is not in keeping with the open market for determining the value of currency.”
The former Finance Minister added, “(If) they remove that circular, you will see how quickly bank transfers will go up to the same GY$230 but it is only because the government has directed someone.”
Jagdeo insisted that the rates at the bank do not reflect the true level of the foreign exchange prices in the market. In this regard, Jagdeo said that a lot has changed; supply has dwindled, and so foreign currency has dwindled significantly.
“I suspect things are going to get worse as we proceed,” the Opposition Leader concluded on this matter.