An overseas-based entity has remitted over US$100m to its foreign accounts and will be sanctioned, according to Minister of State, Joseph Harmon.
He told a post-Cabinet briefing yesterday that commercial banks and non-bank cambios will be subjected to much closer scrutiny by the Bank of Guyana (BoG) as government strives to address unease over the availability of foreign currency.
Harmon said that one of the first to feel the effects of the stricter regulations will be the unnamed overseas-based company, operating locally, which has remitted more than US$100M to its foreign accounts.
Harmon noted that Minister of Finance Winston Jordan had briefed Cabinet about “disequilibrium” which has occurred in the local foreign exchange market and assured that there was no shortage of foreign exchange as alluded to in media reports.
Cabinet was also informed that the BoG, as the regulatory body for banks and non-bank cambios, had been instructed to institute stricter regulations and closer monitoring of the foreign exchange market. BoG will, therefore, issue a number of guidelines with regards to new regulations and monitoring. These guidelines are intended to ensure that exporters repatriate their export earnings to the banking system as required, conduct close monitoring and examination of bank and non-bank cambios to maintain orderly market behaviour and stability as well as ensure that all foreign grants and loans issued are disbursed on time so as to increase the flow of foreign currency to the country.
Asked how the BoG will be able to halt this disequilibrium when it has been unable to stop the siphoning of foreign exchange to particular clients or businesses, Harmon said it was not that the BoG was unable but that the quality of its oversight needs to be strengthened.
Consequently, he said the monitoring capacity of the BoG will be improved to ensure that the rules and regulations by which those in the industry operate are used to hold them on a “much closer or tighter leash”
Harmon confirmed that there are some companies which have been sending large amounts of foreign currency abroad. He noted that there are foreign currency issues across the region in countries such as Suriname, Trinidad, Barbados, Brazil, Venezuela and Jamaica and operators are exploiting loopholes in regulatory systems.
“Once they find there is some spot where they can access it, they will zero in on it. The Bank of Guyana will tighten up on that,” he said before confirming that the company operating locally has been found to have remitted more than US$100M to its foreign accounts. He assured that this entity would be “sanctioned.”
