-says hard currency flows expected to adequately cover imports
Total foreign exchange transactions for the first half of this year increased by 39.0 percent to US$9,889.1m compared to the first six months of last year and the Central Bank is assuring that the exchange rate for US dollar is expected to remain “relatively stable” and flows to the market are expected to adequately cover imports.
The assurance in the recently released report comes amid public expressions by businessmen about difficulties in sourcing US dollars for imports.
The report said that the rise in foreign exchange business is due to increases in transactions through bank and non-bank cambios, foreign currency accounts and hard and soft currencies. Transactions through foreign currency accounts and cambios accounted for 84.2 percent of the total volume of trade. The Guyana dollar mid-rate, used for official transactions, remained unchanged at $208.50.
The total value of foreign currency transactions was US$9,889.1 million, representing a 39.0 percent or US$2,772.8 million jump from one year ago. Aggregate purchases and sales were both higher at US$4,881.7 million and US$5,007.4 million respectively, resulting in a net purchase of US$125.8 million, the report said.
Transactions at the cambios amounted to US$3,965.4 million, representing 40.1 percent of the total market turnover. Bank of Guyana’s transactions totalled US$1,550.6 million or 15.7 percent of the market share. Foreign currency accounts and soft currency transactions were US$4,362.6 million and US$10.5 million, respectively, and together, made up 44.2 percent of the market share.
The turnover generated by the bank and non-bank cambios was US$3,965.4 million, a rise of US$688.9 million or 21.0 percent compared with the same period last year. Cambio purchases were US$1,973.1 million while sales were US$1,992.3 million.
Total transactions for the six bank cambios was 21.3 percent greater at US$3,929.7 million when compared with US$3,240.8 million for the same period last year. The non-bank cambios’ transactions declined by 0.1 percent to US$35.6 million while bank cambios’ share of the market increased marginally to 99.1 percent. The market share of the non-bank cambios declined slightly to 0.9 percent.
Among the four major currencies transacted, the US dollar was dominant with a market share of 96.0 percent. This was followed by the Euro with 2.0 percent, the Pound Sterling with 1.2 percent and the Canadian dollar at 0.8 percent.
“Official transactions processed by the Bank of Guyana were higher at US$1,550.6 million when compared to US$1,342.0 million in the corresponding period last year. Total receipts and payments were US$683.5 million and US$867.1 million, respectively, compared with US$575.6 million and US$766.5 million in the first half of 2023”, the report added.
Receipts from the Natural Resource Fund, the Guyana Gold Board and the Guyana Revenue Authority were US$550.0 million, US$96.0 million and US$33.1 million, respectively, and accounted for 94.4 percent of the total receipts. Payments for the importation of fuel totalled US$371.8 million while payments for other goods and services amounted to US$161.1 million and both represented 61.4 percent of total payments compared with 86.3 percent in the same period last year.
“The combined transactions of the foreign currency accounts increased by 75.4 percent to US$4,362.6 million1 from US$2,487.9 million in the first half of last year. The debits and credits of these accounts were US$2,219.8 million and US$2,142.8 million, respectively”, the report stated.
Transactions by non-resident, government, hotel/ tourism, engineering, ‘other’, insurance/finance and mining/dredging segments together accounted for 93.9 percent of total foreign currency accounts business. Transactions of CARICOM currencies rose to US$10.5 million from US$9.9 million at the end of June 2023. The Trinidad & Tobago, Barbadian, and Eastern Caribbean dollars represented 94.7 percent, 3.7 percent and 1.6 percent, respectively, of the total volume of trades in regional currencies.
The interbank trade by the commercial banks was lower at US$2.3 million compared with US$32.9 million for the same period last year.
The Guyana dollar mid-rate, relevant for official transactions, remained at $208.50 at the end of June 2024 while the weighted average mid-rate was $215.12 compared with $210.34 for the corresponding period in 2023, the report said, thereby indicating a depreciation by 2.3 percent.
At the bank cambios, the average buying rate of the US dollar, depreciated to $213.87 from $213.62, while the selling rate marginally appreciated to $215.52 from $215.59 in the corresponding period last year. The average buying and selling rates of the US dollar at non-bank cambios as at June 2024 dropped to $213.80 from $206.44 and to $216.96 from $209.71 respectively from the corresponding period last year. Moreover, the banks’ spread was lower at $1.65 compared with the nonbanks’ spread at $3.16, the report stated.
The difference between the banks’ and non-banks’ buying rates declined to $0.07 from $7.18 at end June 2023. The difference in the selling rates of the bank and non-bank cambios was $1.44 compared with $5.88 for the corresponding month in 2023. At the end of June 2024, the Trinidad & Tobago dollar remained relatively stable at TT$6.74, while the Jamaican dollar declined by 0.7 percent against the US dollar to settle at J$155.58.
Outlook for 2024
“The exchange rate of the Guyana dollar to the US dollar is expected to remain relatively stable due to a net supply of foreign exchange to the market. Moreover, foreign exchange flows to the market are expected to adequately cover imports”, the report said.
