Recent calls by the Georgetown Chamber of Commerce and Industry (GCCI) for Bank of Guyana to address the apparent shortage of foreign currency in the market is not only selfish, but dangles off the slippery edge of duplicity. This was the essence of the viewpoint offered by Vice President, Dr. Bharrat Jagdeo on the matter at a press conference today.

Yesterday, the chamber launched an attack on the Central Bank saying that it is uncaring, sitting on its hands while GCCI members are experiencing difficulties in accessing enough US currency to conduct trade. The economic regulator returned a knock-out response, as it categorically stated that it does not exist to merely flood the market with foreign currency, as per the demands of the chamber.

Dr. Jagdeo, in his contribution to the matter, sided with Central Bank. He said the institution, along with the Ministry of Finance, is responsible for maintaining the macroeconomic pulse of the nation. To do this, a number of factors have to be carefully considered.

The Vice President said, “Often, at the level of the enterprise, and at the chamber level, their views may not take into account the macro-picture but it doesn’t mean government has to pander to that…Now clearly, you have seen the Central Bank’s response yesterday. It has a role of promoting price stability and controlling money supply. It ensures that (the latter), along with prudent fiscal policy, are conducive to growth.”

Dr. Jagdeo said several members in the chamber would much prefer to have a US currency surplus so that the exchange rate would be cheap, therefore allowing them to pocket bigger profits. This he alluded is selfish as it would lead to an appreciation of the US dollar.

Dr. Jagdeo said he has been exploring the possibility of having commercial banks report on a daily basis, their balance of foreign currency versus the demand. He said this would allow companies to know where the surplus exits and purchase accordingly, instead of assuming there is a shortage.

The economist said it is an option he will discuss with Senior Finance Minister, Dr. Ashni Singh and Central Bank. In the meantime, he said it is for the chamber to have a discussion with the Bankers Association so as to have the market work more efficiently.

The Vice President said if government believes there is a genuine shortage, then it has the means to act. But for the time being, he said the administration will stay its hand on this matter. He said flooding the market with US currency would increase the risk of being afflicted with the Dutch Disease which the chamber has conveniently urged the government to avoid.

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