Dear Editor,

Reference is made to a letter that appeared in the Kaieteur News edition of March 31, 2023. It is regrettable that Chris Ram took great (unnecessary) offence to my letter [ []( “smartCard-inline”) ]which sought to engage him in a public debate or further clarification and explanation from him in relation to his public utterances on the foreign exchange matter. It would appear that he has instead opted to have a third party respond on his behalf. Unfortunately, the contents of the referenced letter suffer from truth deficiency.

In my letter, I sought to further develop my position with some analysis which Ram has failed to do. I therefore take this opportunity to invite him once again to shed some light and explain further―how is it that ExxonMobil is the contributor to the forex issue in Guyana. I will also add a few more questions:

– What is the total net foreign assets in the banking sector?
– What is the net foreign sector asset of the central bank?
– What measures the government should put in place to avoid the impact of the Dutch disease which is a real risk?
– Does he agree with my argument where I said that what he is proposing is essentially capital controls―which is not suitable in a market economy context?
– If Exxon was to have all of their forex in respect of Guyana’s operation in a local bank account (s)―that this would essentially flood the market which in turn would lead to a substantial appreciation in the exchange rate (Dutch disease)?
– Is he suggesting that the mechanism the Government has put in place to measure the daily aggregate demand in the sector would not remedy the issue?
– Does he not agree that the issue is partially due to the deficiencies in the market in terms of how the players operate?
– Does he not agree as well that the domestic financial market is inefficient and unsophisticated (traditionally) which needs to develop at the same pace which the broader economy is developing. This phenomenon partly explains the market deficiencies and imbalances that is a contributory factor to the forex issue―which is largely unrelated to any real shortage of forex in the financial system.

More importantly to note, Chris Ram was part of the private sector delegation that met with the Banker’s Association and the Central Bank on the forex matter. How is it that his position is in stark contrast to the position of the Private Sector Commission and Bankers Association?

Yours sincerely,

Joel Bhagwandin


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