VP Jagdeo cites shortage of physical foreign currency notes

– assures sufficient funds available at Central Bank for local market

Even as the Guyana Government is continuously monitoring the foreign exchange sector and assures that there are adequate funds available to inject in the local market, Vice President (VP) Dr Bharrat Jagdeo on Thursday admitted that is a shortage of the physical currency in circulation.
“There is a bigger shortage of notes,” he declared during his weekly press conference. The VP explained that this pushes up the cost of notes, such as the exchange rates for notes versus the bank drafts.
He cited the reason behind this is that illicit users buy the notes at exorbitant prices because they cannot go through the formal banking system.
“So, some of these companies, like some Chinese companies and others, they go and buy the notes [and] they’re prepared to pay more for the notes. So, it’s creating a shortage of the notes more because they can’t come through the formal banking system,” he stated.
Additionally, he noted a lot of persons are also taking out large sums of foreign currency cash out of the country, and though this is being done legally, it places a strain on the local market.
“There are people who come here, and they come in to take cash to places like Panama and all of that. We’re watching it carefully where they’re taking out large quantities of cash. They declare it, but they take it out to Panama. They should be using the banking system if it’s legitimate [and] not take bundles of cash out. You know because it puts more strain on the availability of the physical currency because that’s harder to get than the bank drafts,” the VP stated.
But even as the local business community continues to grapple with challenges in accessing foreign currency, Jagdeo stressed that the market is constantly being monitored. Some companies have complained that their requests at the local commercial banks for foreign currency take as long as three weeks to be processed, thus impacting their business operations.
According to the VP, “A lot of the businessmen, when we look at their framework, we see multiple requests. They’ll go to five banks and put in the same request at several banks. So, we have that.”

Stabilising the financial sector
Only last month, the Guyana Government introduced a series of measures to stabilise the local financial sector, including the implementation of a new foreign exchange monitoring mechanism.
This was after it was found that transactions by large-scale foreign currency users are not always reflected in Guyana’s formal financial system.
But on Thursday, the VP disclosed that there are still some persons who try to beat the system, despite the safeguards put in place.
“We have a number of people who still think they can beat the system, especially people [from foreign countries] – not the Guyanese so much. You know the groups that we’re looking at [that] create leakages to pay for goods going to Trinidad. We still have that as a big pressing issue,” he stated.
Nevertheless, Jagdeo went onto assure, “We have adequate funds to inject in the banking system.”
Just over a month ago, President Dr Irfaan Ali had disclosed that Government, through the Central Bank, has injected US$1.2 billion into the local financial system so far this year – more than triple the amount provided in the entire year of 2024 – in an effort to meet rising demand for foreign currency.
At the time, the Head of State had outlined a new series of measures aimed at tightening oversight, reducing capital flight, and ensuring transparency in foreign exchange transactions.