With the increase of overseas-based businesses in Guyana, persons or companies operating here cannot insist on the use of foreign currency for transactions in the country unless permission is granted by Government.
This is according to Attorney General and Legal Affairs Minister Anil Nandlall during his weekly programme “Issues In The News”.
Commenting on the fact that some companies are demanding that all transactions be done in United States dollars, the Attorney General said this is unlawful.
“There are businesses in Guyana, whatever services they are offering or whatever they are selling, they are insisting that the transactions be done only in US dollars. Ipso facto and prima facie that is not permissible,” he contended.
According to Nandlall, under the laws of Guyana, the Guyana dollar remains the valid legal tender for transactions being done in Guyana.
In the same breath, however, the AG explained that there are provisions in the law that permit persons or businesses to trade in either Guyana dollars or US dollars converted at a rate agreed upon by the parties.
“So, one can transact business in either Guyana Dollar or its equivalent in US Dollar, so that is permissible. What is not permissible, however, is the insistence on the exclusive use of a foreign currency to conduct a transaction in Guyana,” Nandlall noted.
Further explaining this, he pointed out to this publication that this provision goes both ways.
Using the example of rental of properties, the AG stated that the landlords usually quote the rates in US dollars but they cannot insist on being paid in that currency nor can the tenants insist on paying in US dollars.
AG Nandlall went on to outline, nevertheless, that the exclusive use of foreign currency can only be done with special permission from the Finance Minister under the Foreign Exchange (Miscellaneous Provisions) Act. These persons/businesses will have to submit an application to the Minister.
“It is indeed permissible, but one must get the approval, one must get the permission of the Minister of Finance to deal exclusively in foreign currency. To insist that transactions must be done exclusively in foreign currency without an approval from the Minister of Finance would be unlawful,” the Attorney General stressed.
But even as reports surface of some businesses insisting on the use of foreign currency for transactions here, there have been several complaints over the past weeks by local companies of a shortage of US dollars in Guyana.
This claim, however, has been dismissed by Bank of Guyana (BoG) Governor, Dr Gobind Ganga, who contends that there is enough.
In a statement from the Department of Public Information (DPI), it was noted that “…the banking system, with an average monthly turnover in excess of USD500 million, has an adequate supply of US dollars to meet demand. As of February 22, 2023, the banking system had USD 99.5 million available for transactions.”
According to the BoG, while the available funds are not evenly distributed among the banks, there is enough to cover the cash flow needs of transactions arising from businesses in Guyana.
It noted that cash flowing to the banks is cyclical; as such there will be periods of excess liquidity and periods when there will be a limited supply. Nevertheless, the central bank said it would continue to monitor the foreign currency position in Guyana to ensure there was no disruption nor adverse impact on economic activities.
Dr Ganga had previously indicated that some banks could be “hoarding” their foreign currency which could be the cause of the apparent “shortage”.
Only last week, key Private Sector players said they wrote the Guyana Association of Bankers Inc (GABI) to have discussions on this matter.
