Guyana says Trini businesses buying imports with local FOREX

Guyana’s Vice President Bharrat Jagdeo says Trinidad and Tobago businesses have found a solution to the prolonged foreign exchange shortage in their homeland by buying their imports through Guyana and shipping them to the neighbouring Caribbean Community (CARICOM) country.

“We notice a trend here is that some Trinidadian companies are procuring large quantities of goods for their businesses in Guyana and in Trinidad and making payments from here to their suppliers, so they are utilising our foreign currency to make those payments,” Jagdeo told a news conference.

Trinidad and Tobago has experienced a chronic shortage of foreign exchange since 2014, with Finance Minister Colm Imbert saying recently that the oil rich twin island republic is experiencing a foreign exchange shortage, not a crisis.

Earlier this year, a staff mission from the International Monetary Fund (IMF) said it was encouraging the Ministry of Finance and the Central Bank to remove all restrictions on current international transactions as a means of creating a more investment-friendly business environment that would drive the diversification of the Trinidad and Tobago economy.

“It would also help create a more conducive business environment for the private sector to invest and diversify the economy. Over the medium term, greater exchange rate flexibility would reduce the need for fiscal policy adjustments to restore external balance and create room for more counter-cyclical monetary policy (which would stimulate a slowing economy and slow an expanding one),” IMF staff said.

“IMF staff encourages the authorities to remove all restrictions on current international transactions, while providing sufficient foreign exchange to meet demand for all current international transactions.”

Among the current restrictions of Trinidad and Tobago foreign exchange regime include the limitation in the movement of country’s main exchange rate, the US to TT, to a narrow band in which the selling rate is not allowed to go beyond the ceiling of US$1 to TT$6.7997.

Jagdeo said the move by Trinidadian businesses to purchase goods through Guyana might be one of the reasons for the selling rate of the US dollars being as much as GUY$220 for US$1.00.

“We have to examine those who are requesting the foreign currency at some point in time to see if there are unusual spikes from some people based on what we have observed- this payment of goods for another country,” Jagdeo told reporters.