Gov’t could immediately supply forex if shortage exists – Jagdeo

There are still some concerns about the availability of foreign currency locally but Vice President Dr. Bharrat Jagdeo doesn’t believe that a shortage exists.

Further, he told reporters that if there is a sustained shortage, the government could immediately inject large amounts of foreign currency into the local market.

“We believe that when you look at aggregate demand and aggregate supply (of foreign currency) in the entire market, it should even itself out at a rate that doesn’t see massive appreciation or depreciation,” the Vice President said during a party press conference on Thursday.

He, however, said the challenge is that some banks may have more foreign currency supplies than others. So when people go requesting foreign currency at banks with a low supply, it may seem as though there is a shortage.

That doesn’t mean that there is an overall shortage of currency, Jagdeo noted. And he affirmed that the government, through the Bank of Guyana (Guyana’s central bank), would regulate the market.

“The moment we believe there is a sustained shortage, then we can inject large amounts of foreign currency to do that.

“… We have the capacity to do that, we have large amounts (of foreign currency) and we won’t hesitate to use the central bank to smooth out the market, including the foreign exchange,” Jagdeo said.

Since last year, some private sector players have been complaining of a shortage of foreign currency, specifically US dollars, needed to conduct transactions locally. Jagdeo has consistently explained that the government must work diligently to guarantee that there is domestic price stability through the promotion of stable credit and exchange conditions.