By Antonio Dey | HGP Nightly News
A prominent financial analyst has challenged the government’s narrative that Guyana is not facing a foreign exchange crisis, arguing that the administration’s own actions suggest otherwise.
Chartered Financial Analyst GHK Lall stated that the government’s rollout of a nine-point plan to tackle foreign currency shortages is, in itself, an admission that the country is grappling with a serious issue.
“The fact that the government has rolled out a nine-point plan to deal with the foreign exchange crisis is indicative that there is indeed a problem,” Lall asserted.
His comments follow statements made by Vice President Dr. Bharrat Jagdeo, who recently dismissed claims that Guyana is experiencing a foreign exchange crunch. Jagdeo instead attributed the increased demand for foreign currency to massive capital and infrastructure projects being undertaken nationwide.
“Although we have injected $1.2 billion into the market so far this year, we can inject significantly more funds because the government has the capacity to do so,” Jagdeo said during a press briefing at the Arthur Chung Conference Centre.
He maintained that the country’s reserves remain strong, noting that local companies are borrowing more from commercial banks to finance the importation of equipment — a factor he said is temporarily inflating demand for U.S. dollars.
However, GHK Lall accused the administration of “playing games with a serious matter.” He pointed to concerns raised by the government itself about credit card misuse for commercial transactions as one sign that the system is under strain.
“We go to point number five — credit cards. Yes, those can be misused for commercial purposes, and that can be a drain on foreign exchange,” Lall said.
The analyst suggested that the government consider temporary restrictions on non-essential imports to conserve foreign reserves. He also warned about the impact of capital flight, arguing that frequent outflows of foreign currency by private individuals and businesses can destabilize the market.
“If one man takes a million dollars out of here five or six times a year, that’s five million U.S. dollars gone. You multiply that, and you’re looking at hundreds of millions that the system can’t afford to lose,” Lall reasoned.
To stabilize the situation, Lall proposed exchange rate management to reflect real market forces, reduced state spending, and mandatory foreign currency deposits for businesses earning in U.S. dollars.
“You’ve got to open a bank account here and deposit your foreign exchange here — all foreign exchange earnings should be deposited locally. That could be a big chunk of relief,” he concluded.
As debate continues, the government maintains that Guyana’s economic fundamentals remain strong, while analysts like Lall caution that ignoring warning signs could deepen the crisis in the months ahead.
