GCCI lauds Govt’s intervention to curb forex challenges

President of Georgetown Chamber of Commerce and Industry (GCCI) Kathy Smith, has welcomed the recent interventions by the Guyana Government to stabilise the local financial sector, including the implementation of a new foreign exchange monitoring mechanism. During an engagement with the heads of commercial banks and other stakeholders on Monday last, President Dr Irfaan Ali outlined a new series of measures aimed at tightening oversight, reducing capital flight, and ensuring transparency in foreign exchange transactions. According to the GCCI President, these decisive actions to address Guyana’s foreign exchange challenges reinforce the Ali-led administration’s commitment to macroeconomic stability as national development is scaled up. “They show that we are not only building physical infrastructure but also strengthening the financial architecture that underpins sustainable growth. And I know as Guyanese, we all would welcome some forex [foreign exchange] in the country. So, we are grateful that His Excellency has listened to us, he has heard us, and he has decided to put measures in place that will benefit Guyanese,” Smith said while addressing industry stakeholders at a breakfast event hosted by the GCCI on Thursday last. In recent years, the local private sector has complained about an apparent shortage of foreign exchange currency in the local market and has repeatedly called for interventions by the state. However, the Government has maintained that there was no shortage, with sufficient reserves available at the Bank of Guyana (BoG) to meet rising local demand for foreign currency. In fact, the Central Bank has injected some US$1.2 billion into the local financial system so far this year – more than triple the US$332 million provided in the entirety of 2024.

Credit card scrutiny
President Ali, on Monday last, pointed to an extraordinary surge in credit card transactions as one of the drivers of foreign exchange outflows. According to the Head of State, credit card clearances rose from US$91.3 million in 2023 to US$347.5 million in 2024, and so far this year, transactions have already reached US$252 million even before the year-end holiday period – something which the President contended must be analysed to ascertain whether personal credit cards are being used to settle business transactions. To deal with these pressures, President Ali has announced a series of interventions that will reshape how foreign exchange requests are processed. Going forward, importers seeking foreign currency will be required to provide commercial invoices before their banks can release funds. Once goods arrive in Guyana, those invoices, along with bills of lading, will have to be submitted to the Guyana Revenue Authority (GRA) and to the commercial banks, ensuring that the shipments match the forex requested.
If importers fail to comply with this documentation process, they will not be able to access foreign currency for future requests. To streamline verification, commercial banks will now be required to forward invoices and bills of lading to the BoG, effectively creating a central clearinghouse that will monitor and reconcile all transactions. The President also signalled stricter rules for credit card use. Commercial banks will have to ensure that personal credit cards are not being misused for large business transactions or for importing goods, which he noted was becoming a loophole in the system. Entities found to be inflating invoices or engaging in related-party over-invoicing with the intent of moving money out of the country will face penalties.

Additional safeguards
Additional safeguards will also be implemented at Guyana’s borders. Persons leaving the country with large sums of foreign currency will have to declare not just receipts from commercial banks but also the source of funds obtained from Cambios and other licensed dealers. Meanwhile, companies registered under the local content framework must hold local bank accounts and ensure that oil and gas service payments are remitted in foreign currency to those accounts.
In a bid to promote transparency and discipline, a new single-window reconciliation system will also be established at the BoG to ensure that records from commercial banks, the central bank, and the GRA are properly aligned before any new foreign exchange request is approved. This measure will close gaps that currently allow some companies to use duplicate invoices at multiple banks, creating artificial demand for foreign currency. Only last Thursday, Vice President (VP) Dr Bharrat Jagdeo assured that these new measures will not burden ordinary Guyanese or small businesses but will instead target loopholes that allow non-Guyanese entities, like the Chinese-owned supermarkets, to exploit the system and evade taxes.
During a press conference, VP Jagdeo pointed out that the measures being rolled out by Government are aimed primarily at large-scale foreign currency users whose transactions are not always reflected in Guyana’s formal financial system.
“We’re not going to restrict Guyanese from purchasing foreign currency. In fact, we will make sure that we provide adequate amounts from the Central Bank to meet domestic demand. But we’re going to try to close the loopholes on some of those who have been abusing the system… For example, the Chinese supermarket that you are seeing, where most of these supermarkets don’t have a bank account. They don’t have a bank account, the owners don’t have a bank account, and they’re importing a lot of goods to sell in their supermarkets. How are they getting the foreign currency? So, closing these loopholes would allow us to collect more taxes from these foreign entities, mainly, who are operating here, or if they are using our foreign currency on credit cards to meet demand in another country,” Jagdeo said.

Chinese Embassy advises its citizens
Following this, the Chinese Embassy in Georgetown on Friday called on Chinese-owned and Chinese-operated shops in Guyana to engage in lawful business operations. In a notice, the Chinese Embassy reminded the local Chinese business community to ensure they “…apply for business licences, residence permits, and ID in accordance with the relevant laws of Guyana; open bank accounts; and conduct business activities within the scope permitted by the relevant law of Guyana.” Chinese businesses are also urged to standardise daily business practices. Specifically, the Embassy implored that they “…strictly control product quality; do not sell expired, unidentified-origin or counterfeit goods. Strictly adhere to relevant laws; do not engage in money laundering, smuggling, commercial fraud, or similar activities. Strictly comply with tax regulations; invoice customers accurately and pay taxes regularly; contribute social insurance for employees legally.” Additionally, the Embassy called on Chinese businesses to actively shoulder social responsibilities in Guyana, ensuring that they hire Guyanese employees legally and make positive contributions to local economic development. Moreover, Chinese business operators are encouraged to “…cooperate fully with law enforcement inspections. Should you encounter unfair treatment, handle the situation calmly and rationally while gathering evidence to protect your legitimate rights afterward.”
According to the Chinese Embassy, Chinese businesses should also enhance safety awareness and strengthen risk prevention. “Equip your premises with necessary security devices, minimise on-site cash reserves, and hire security guards if necessary. In emergencies, call the police immediately and seek assistance from the Chinese Embassy,” it told business operators.