A SUDDEN increase in local demand for United States (U.S.) dollars has caused the Bank of Guyana (BoG) to temporarily stop buying Trinidad and Tobago (TT) and Barbados dollars from cambios.

This is according to BoG Governor, Dr. Gobind Ganga, speaking at a press conference on Thursday.

“We have temporarily stopped buying TT and Barbadian currency from cambios,” he said, adding that a market analysis has found that demand for U.S. dollars stands at about $6M.

The BoG Governor related that there is evidence that suggests that persons were travelling from Trinidad and Tobago and Barbados, were buying U.S. dollars and this has resulted in an increase in those dollars locally and a greater demand for U.S. currency

He indicated that there is approximately BDS$13M currently circulating in Guyana; an increase from BDS$8M in 2014. Similarly, there has been an increase from TT$9.1M in 2014 to TT$38M at present.

According to Dr. Ganga, the economic downturns in Trinidad and Tobago, Barbados and Suriname have led to severe foreign currency shortages in those countries. On Monday, the BoG recorded a working bank balance, excluding commitment, of about US$10.7M, while request for foreign currency at that time was nothing.

At that time, there was a surplus of about US$8.3M, Dr Ganga said. However, a news report carried in Kaieteur News on Monday, which suggested that there was a shortage of foreign currency, was also responsible for this shift in demand.

“After this [news] report, there were a number of requests [for foreign currency] and we found that not all of these requests were legitimate. We have requested from commercial banks, invoices to substantiate some of these requests. All that we have received were some letters,” the governor said.

He noted that some of these requests could and will be denied, once it is discovered that they are not legitimate, or in keeping with the Anti-Money Laundering (AML) regulations.

He pointed out though, that commercial banks nevertheless, have made great strides in satisfying those legitimate demands. Further, he noted that at present, there is a legitimate demand for about US$6M, and that the news report was largely responsible for this.

As such, Dr. Ganga said that he has spoken to the Chief Executive Officers (CEOs) of some of these commercial banks and they are working to address this issue.

“We don’t expect a continuation of sensationalisation that there is a chronic problem. It is not so,” he added.

The governor also cautioned against media speculation, which he contended could affect an otherwise “healthy and strong” economy compared to any of the Caribbean countries, based on “soundness indicators.”

“We do have the wherewithal to ensure our financial system continues to be sound,” he said.