Foreign currency shortages in T&T, inflated invoices in Guyana impacting local demand

While there has been an outcry in sections of society over foreign currency shortages, Vice President Bharrat Jagdeo has highlighted that a major factor in these shortages is the high demand for US dollars in neighbouring Trinidad and Tobago, which has had a detrimental impact on the availability of foreign currency in Guyana.
During his Thursday press conference, Jagdeo addressed the issue of the foreign currency market, wherein complaints have been emanating from some local businesses that there is a shortage of US dollars in the market.
According to Jagdeo, however, a major reason for this is the demand in Trinidad and Tobago for foreign currency. This has resulted in the twin island republic, where the United National Congress (UNC) government was recently elected to office, pulling large amounts of US dollars from Guyana.
“So, this is happening through several places. And we’re looking at this now. You know, in Trinidad it’s practically impossible to get foreign currency in that market. People don’t write about that, but businessmen have to wait for ages – six months etc. — and they cannot get foreign currency in that market,” Jagdeo related.
“Some of the cambios and banks, are now selling the foreign currency to Trinidadians who come here. Because they come here to get the foreign currency.
“Thirdly, you have some local companies now that are capitalizing on this. They buy from the cambios and banks that sell at maybe $216 or so and they’re selling to the Trinidadians at $220, $224,” Jagdeo said.
Jagdeo also revealed that some companies have been submitting inflated invoices.
“So, over the last few years, we’ve witnessed a phenomenon here where we believe that some of the invoices submitted by companies are inflated, so that when the payment goes to their suppliers, it is for goods that will go into Trinidad and Tobago,” Jagdeo said.
Another factor is the large amount being spent on capital projects, which Jagdeo acknowledged has been resulting in some pressures being brought to bear on the foreign currency market.
“Historically, very little capital goods were financed from our foreign currency market. It used to be mainly consumer goods and intermediate goods. But our capital imports have grown from $600 million to over $4 billion. So, it means we’re financing a lot of capital expansion in Guyana.”
According to the Vice President, in the short term this puts pressure on the Balance of Payment (BOP) and the exchange rate. However, in the long term this will also benefit the foreign currency market.
Over the past several months, local businesses have reported significant delays in acquiring foreign currency for international transactions. These issues, coupled with surging demand for imports, have put a strain on the country’s financial system.
President Dr Irfaan Ali had previously noted that the demand for imported goods —ranging from food to vehicles — grew by 106 percent between 2019 and 2024, while the importation of fuel, chemicals, and other intermediate goods surged by 160 percent. Additionally, there has been a 317 percent increase in credit and debit card usage over the same period.
To support this growth, the sale of foreign currency to commercial banks rose by a staggering 1744 percent between 2019 and 2024.
However, the administration has acknowledged that this rapid expansion also requires careful monitoring to prevent misuse of the local banking system for foreign markets.
President Ali had confirmed previously that a probe would be done into possible exploitation of Guyana’s foreign currency system.
“We have to see whether there are other markets that are buying through our system for their markets, and that is something we are looking at,” he had said in December.