THE Guyana Manufacturing and Services Association (GMSA) has expressed disappointment and worry over what it has described as the “rate of deterioration” of the Guyana dollar and has called on Government to take steps to stabilise the value of the local currency.
In a statement to the media on Wednesday, the Manufacturing Association said that at its last board meeting, the body deliberated deeply on the woes of the manufacturing sector and it was at the very meeting that members expressed concern about the devaluation of the Guyana dollar and “the real exchange rate.”
The GMSA said it estimates that the real exchange rate when available being used for the purchase of foreign exchange is $230 for the replacement of imported inputs into the sectors.
“We are concerned that our ability to keep prices stable will be limited and guided by this new rate. The burden of the changes in the VAT regime will also cause production costs to move upwards,” the statement to the media said.

COST CUTTING MEASURES
As such, the GMSA has urged all sectors to implement cost cutting exercises and have noted that some entities have started to “rationalise employment.”
“The rise in the price of the US dollar will have far reaching effects on our country as a whole both socially and economically,” said the GMSA while calling on Finance Minister, Winston Jordan, to urgently hold broad consultations on the matter.
Additionally, the GMSA called on the Bank of Guyana and the Government to take steps to stabilise the value of the Guyana dollar immediately by injecting funds into the system since the body believes that the rate is being driven by simple economic formula of supply and demand.
“This situation has the potential to further increase unemployment and at worst wipe out companies,” the statement said.

‘NO’ SHORTAGE
Over the past two months persons have been complaining that there is a shortage of foreign currency, specifically the US dollars, here, but BoG Governor, Dr Gobind Ganga, has assured that there is no such shortage.
Earlier this month, Dr Ganga told reporters at a press conference hosted by the Finance Minister that transactions have been on the increase from the start of the year. According to Dr. Ganga, in January, there have been purchases by bank cambios totalling US$82.7M and by February 18, purchases increased to US$158M.
As it relates to sales by bank cambios, the BoG Governor said there has been an increase from US$95.1M in January to US$164.6M on February 18.
“You would have seen significant increase over the month of January with respect of purchases of singles,” said Dr Ganga who noted that in the case of non-bank cambios, purchases totaling US$3.2M and sales totaling US$2.4M have been recorded for the month of January.
As of February 18, purchases stood at US$5.6M while sales were recorded at US$6.3M.
“With respect to spread, I know the non-bank cambios have been complaining about the spread but I am not too sure if they are saying it is too high or too low. In 2016, non-bank spread was $1.64, we have almost doubled that in moving it to $3,” said the governor.
Last month, the BoG had informed bank and non-bank cambio dealers, as well as money transfer agencies of the need for them to fix the spread between buying and selling rates to be no more than $3.
That instruction from the bank had caused much concern among some who operate the aforementioned businesses.