GCCI not clear on how foreign currency availability is determined – Bank of Guyana

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In response to a stern show of disappointment from the Georgetown Chamber of Commerce and Industry (GCCI) on its handling of a supposed shortage of US currency in the country, the Bank of Guyana (BoG) noted that the business body is unsure of how an open market economy functions.

The GCCI in an earlier release cited the BoG’s “lack of action, vision and modern financial policies to improve access to financing for local businesses.”

The BoG said that it is an “independent central bank” with a clear mandate defined by law and in keeping with international norms and standards for central banking. Its objectives include fostering domestic price stability through the promotion of stable credit and exchange conditions.

According to the BoG, the law establishing the central financial institution also stipulates that the Guyana Dollar is a freely floating currency, traded in a market whose prices are determined by prevailing market conditions – demand and supply.

“The GCCI appears to be of the mistaken impression that the BoG exists to ensure that foreign currency is available to their membership at the times that they demand and at prices that they demand. This is simply not how an open market economy operates and is simply not how foreign currency availability and pricing are determined where floating currencies are concerned,” the BoG clarified.

It steered the GCCI in the direction of the Banks operating in Guyana or the Bankers Association, “to better understand the factors that influence the availability and pricing of foreign currency in the domestic market.”

The BoG said it remains committed to discharging its mandate and to engaging with the private sector on matters of concern to them in a mutually respectful manner.

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