New FOREX rules will not affect small, local businesses – Jagdeo

Vice President Dr Bharrat Jagdeo has explained that the new rules announced for the foreign exchange system in the country will not affect small, local businesses.

Earlier this week, President Dr Irfaan Ali announced a slew of measures aimed at strengthening Guyana’s financial system, with a specific focus on financial and banking services and the foreign currency market.

During a press conference today, Jagdeo clarified that the measures announced by the President are intended to crackdown on abuses in the system.

“We’re not going to restrict Guyanese from purchasing foreign currency. In fact, we will make sure that we provide adequate amounts from the Central Bank to meet domestic demand, but we’re going to try to close the loopholes on some of those who have been abusing the system,” Jagdeo explained.

“So, when you see the need to submit invoices now, it is not to make the system more onerous on Guyanese, because there will be significant exemptions for small people…If you go for your small business, you wouldn’t have to go through that rigid system of submitting all the invoices to show that the invoices match the demand,” he further clarified.

He noted that the measures would mainly apply to the larger users of foreign currency.

“…because we believe it’s siphoned off there and then sold to other people who are non-Guyanese, to meet their demand elsewhere, or to meet demand that is not captured by the GRA that is generated from these foreign entities.”

For example, he highlighted that many Chinese-owned supermarkets operating in the country do not have bank accounts.

“They don’t have a bank account. The owners don’t have a bank account. They’re importing a lot of goods to sell in their supermarkets. How are they getting the foreign currency? So, closing these loopholes would allow us to collect more taxes from these foreign entities, mainly who are operating here, or if they are using our foreign currency and credit card to meet demand in another country. I’m not going to call any country’s name…but you know who I’m talking about,” he noted.

Meanwhile, Jagdeo emphasised that “there is no crisis in the foreign currency market”, noting that “we’re in a great position today to address any growth in demand for foreign currency in the future.”