We have a strong capacity to meet demand, no crisis in the foreign exchange market -Jagdeo
Vice President Dr. Bharrat Jagdeo has assured that the Government is in a strong position to manage Guyana’s foreign exchange market, with both the technical expertise and financial resources to respond to any shifts in demand.
Speaking at a press conference on Thursday, Jagdeo noted that the government has injected $1.2 billion into the market so far this year, but stressed that much more can be made available if necessary. He explained that this capacity will continue to grow in the coming years as revenue from the Natural Resource Fund (NRF) flows into the treasury.
“If you look at the projections for that revenue, it runs into billions in foreign currency,” Jagdeo said. “We’re in a major period where we’re building out the infrastructure to last us decades. A lot of the infrastructure is financed from the local market, through the local banking system, and we’re providing the foreign currency for that investment.”
He pointed to the new Demerara River bridge as an example, highlighting that although the project is backed by a loan, over US$100 million is being financed directly through the treasury. Similarly, he said the Government has been financing most of the Gas-to-Energy (GTE) project with hundreds of millions of U.S. dollars sourced from the local market.
Jagdeo acknowledged that there has been a significant rise in demand for foreign currency due to capital investments, but stressed that this will not last forever. “A lot of those investments are not gonna go on forever. The demand for those will fall off when the projects come to an end,” he said.
Looking ahead, he highlighted the transformative impact of the GTE project, which, once operational, will substantially reduce the country’s need for fuel imports. Additionally, supplying cooking gas locally will remove the need to import that product. Together, these shifts are expected to cut foreign exchange demand by some US$450 million to US$500 million annually.
Jagdeo stressed that Guyana is in a “great position today to address any growth in demand for foreign currency in the future,” dismissing speculation of instability in the market.
“There is no crisis in the foreign currency market,” the Vice President declared. “There is no capital flight of a major nature from Guyana. If you look at the inflows in the balance of payment, you will see this is the place people want to bring their money because the returns on their investments are substantially higher than they can get in many parts of the world.”
