Guyana’s Natural Resource Fund (NRF) received a jaw-dropping $91.5B (US$438.95M) in oil revenues during the second quarter of 2023. According to the (NRF) report prepared by Central Bank, the $91.5B comprised profit oil totalling $80.4B and royalties at $11.1B.
Central Bank said higher levels of profit oil and lower amount of royalties were recorded for this quarter in comparison to $33.7B and $12B respectively for the previous quarter. These funds were deposited into the Natural Resource Fund account held at the Federal Reserve Bank of New York. Since its inception, the Fund has accounted for $489.3B from 29 lifts of profit oil and $69B from royalties.
Over the quarter, it was noted that the Federal Reserve increased its interest rates target range once, moving it from 4.75% – 5% to 5% – 5.25%. As a result of these increases, interest rates on overnight deposits were higher. The higher rates as well as a higher account balance, resulted in the Fund earning a higher level of interest income on its overnight deposits than previous quarters. The Fund earned $4.1B in interest income over the quarter compared to $3.2B in the previous quarter.
With respect to withdrawals, the bank said transfers to the Government of Guyana’s Consolidated Fund account amounted to $41.7B. For the year to date, a total of $83.4B (US$400 million) has been transferred from the Fund, accounting for 39.92% of the estimated amount budgeted to be withdrawn in 2023 – $208.9B.
The Natural Resource Fund was formed by the enactment of the Natural Resource Fund Act 2019 which was passed in the National Assembly on January 3, 2019 and assented to by the President on January 23, 2019. This act was subsequently replaced with the Natural Resource Fund Act 2021 which was passed in the National Assembly on December 29, 2021 and assented to by the President on December 30, 2021.
The Act gives the Bank of Guyana the responsibility for the operational management of the Fund. Its quarterly NRF report published on its website is one of the requirements under the law.