The US dollar has remained stable on the local market but some cambio dealers feel that it is becoming scarce on account of the financial meltdown in the USA, and the rates could jump significantly in 2009 if the crisis deepens.
The dealers also feel that the buying and selling rates for the Euro, Pound Sterling and the Canadian dollar, which have dropped significantly in recent months, are also the result of the global financial crisis.
In a telephone interview, Nazar Mohamed of Mohamed’s Cambio on Lombard Street told Stabroek News that less foreign currency was already coming into the cambio over the past two to three months.
On a normal working day, Mohamed said that the cambio would buy about US$25,000 to US$30,000 a day but over the past two to three months the number has trickled down to about half of what the cambio would normally trade.
“Right now it has cut about in half,” he said adding, “and we do not have enough money to sell to businesses seeking large sums for trading purposes.”
Mohamed said that a shortage of foreign currency has not been seen since 1992 when the PPP/C took office but he feels a shortage was looming and this could spell trouble for businesses and the economy since much of the economy depends on remittances that come from overseas-based Guyanese who look after homes and relatives back in Guyana.
Noting that Mohamed’s cambio was a big business, he said that, “we are already seeing the meltdown. When it would really start to kick-in would be in another few months.”
At the moment the US dollar trades between $201 and $205. Visitors are not coming to Guyana to exchange currency and Guyanese are not sending remittances as they did over the past two to three months. “It is getting tough for businesses that want to buy large sums of foreign currency,” he said.
At Sookraj Cambio, a dealer, who did not want to be named, said that fewer persons were coming into the cambio to sell their foreign exchange.
However, the dealer said that the drop in money transfers or remittances was just about three per cent. The dealer noted that October was generally a low month in trading coming shortly after the August holidays which is a peak period and when persons engage in a lot of school shopping and there are a lot of overseas-based visitors. Peak period also includes the major holidays such as Mashramani, Easter and Christmas. Then there would be a lull in trading.
The dealer said that the remittances for August and September this year were actually higher than last year but there has been a decline in remittances for October. The dealer saw a dip of about three per cent from last month and also observed that compared to last year October for the same period, the percentage of remittances was lower this year.
At L. Mahabeer and Son Cambio, one dealer, who also asked not to be identified, said that for the past couple of weeks, the rates for Euros, Pound Sterling and the Canadian dollar have fallen significantly. This was fixed locally based on how it is trading on the world market. The US dollar has remained relatively stable but this may not hold, he said, because the US dollar is the foreign currency most in demand and if it is not readily available the buying and selling prices would increase.
At Mahabeer’s cambio, the US dollar was being bought at $200 and sold at $203 which was the average rate for over a decade, but the Canadian dollar has slumped from a high of $190 and is now being bought at $160. The Pound Sterling dropped from a high of $370 to $330 and the Euro from $290 to $255.
Money transfer entities, Moneygram, Western Union and Laparkan Trading when contacted asked for time to release the status of remittance transactions from their establishments. (Miranda La Rose)