Unauthorised money changers to face the law – BOG warns

The Bank of Guyana has put unauthorised money changers on notice that if they continue to ply their illicit trade and are caught, they will face the full extent of prosecution under the Dealers in Foreign Currency (Licensing) Act 1989.

According to the bank in a statement on Wednesday, only authorised dealers such as banks and non-bank cambios licensed under the Dealers in Foreign Currency

Act are authorised to conduct buying and selling of foreign exchange.

“The Dealers in Foreign Currency Act (Licensing) Act 1989 states that foreign currency can only be bought and sold from a licensed authorised dealer. Section 17 (1) of the Act states that any person who sells to any person other than a licensee or authorised dealer, any foreign currency shall be liable on summary conviction to a fine and imprisonment for one year.”

The bank reminded that section 17 (2) of the Act states that “any person not being an authorised dealer who buys or sells any foreign currency shall be liable on summary conviction to a fine and imprisonment for three years.”

Bank of Guyana stated it notes with concern that foreign exchange activities are being conducted outside of the official legal system and emphasises that any person caught contravening the Dealers in Foreign Currency (Licensing) Act 1989 will be prosecuted.

Money changers, for the most part, are involved in a risky business that has already seen a number of them become targets of bandits. And during those incidents, the attention that was brought to bear on them was a sympathetic one.

But a not so benign spotlight was recently shone on money changers, after shortages of foreign currency saw them hiking their rates. For instance, money changers around the city had raised their rates for the US dollar to G$220, although the rate was hovering at G$210.

Both Finance Minister Winston Jordan and Governor of the Central Bank of Guyana, Dr Gobind Ganga, had maintained that there is no shortage of foreign currencies in Guyana. This is despite a number of complaints from customers of being turned away.

Dr Ganga had said that despite stern warnings from authorities, businesses are suspected to be hoarding foreign currencies and commercial banks and cambios are claiming shortages in order to cause customers to resort to paying exorbitant rates for foreign currencies, even purchasing elsewhere in light of the contrived scarcity.

And Jordan had announced that the Central Bank has no record of shortages at commercial banks. “The Governor has assured me that he doesn’t know anything about that, because the banks haven’t approached him for foreign exchange,” Jordan stated on the radio programme.

Usually, when commercial banks experience a shortage, they turn to the Bank of Guyana to purchase the currency to meet the demands.

Jordan recently announced that the foreign exchange reserves at the Bank of Guyana are in excess of US$600 million, but commercial banks and cambios across the country continue to turn away customers, claiming a shortage of the US dollar; and based on the findings of this newspaper’s investigations, popular cambios are turning away regular patrons who are interested in purchasing foreign currencies.

This had resulted in businesspersons and the average Guyanese being forced to buy foreign currencies at exploitative rates.