Oil $$$ safe in US Bank
Minister of Finance, Winston Jordan
Minister of Finance, Winston Jordan

…Min. Jordan assures nation NRF in Federal Reserve Bank beneficial to Guyana

MINISTER of Finance Winston Jordan has assured the nation that there is no need to be fearful about the country’s oil revenue, in the form of the Natural Resource Fund (NRF), being placed in the United States Federal Reserve Bank.

The Finance Minister made this clear on Thursday during an interview with the National Communication Network (NCN). His response on the matter comes as some Guyanese have begun to question the reason behind Guyana’s NRF being lodged in a foreign bank, given the recent threat of sanctions as a result of the country’s electoral situation.

In response, Minister Jordan told the public that the placement of the NRF in a U.S. Bank is beneficial for the country, as it largely reduces inflation, helps with interest earning, and that despite these benefits, according to law, it must be placed in a US$ bank. “One of the reasons for keeping the money offshore is that it will help us with inflationary impacts of such large sums of money coming in to the economy so quickly. The Natural Resource Fund Act does say that the money should be kept offshore,” Minister Jordan said, adding:

“I don’t think we should necessarily be afraid that sanctions would deny us the use of our resources. That is an extreme judgement to take.” The NRF Act Section 21 (1) states: “Petroleum revenues shall be directly paid into a bank account denominated in United States of America Dollars and held by the Bank as part of the Fund.”

Meanwhile, the NRF Green Paper states: “Petroleum revenues, as well as excess revenues from mining and forestry will be deposited into the NRF – a US dollar bank account held by the Bank of Guyana – from which withdrawals will be made, based on a fiscal rule.”

However, the Bank of Guyana (BOG) is the Operational Manager of the Fund,
and manages it in accordance with the Operational Agreement and Investment Mandate. The BOG is required to submit quarterly financial reports on the NRF to the Ministry of Finance, while the Ministry of Finance has to submit an annual report
on the NRF to Parliament.

“The United States currency is reserve currency used by almost every country in the world, and we have trading relations with the United States, and our domestic currency is related to the U.S. currency,” Minister Jordan said, adding: “So, the monies are outside earning interest and being invested, so far, strictly speaking, in federal reserve earning interest, albeit very low, but it’s conservative at the moment and as soon as this political situation goes back to ‘normal’, then we’ll turn our attention to the uses of that fund and how it is invested. I don’t believe we ought to be scared into feeling that this money is out there and will be appropriated by some other person.”

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