Guyana has lost confidence in Barbados’ monetary policy, hence the reason it suspended trading in the Barbados currency, a former Central Bank of Barbados (CCB) consultant has charged.
Economist Ryan Straughn is convinced Guyana’s central bank was sending a clear message to the authorities here that it was uneasy with the CCB’s printing of money to support the Freundel Stuart administration’s programmes.
“You can only put so much money in the market before people start questioning its value. I think it is in a large part due to the printing of money. It pretty much brings into question the faith that you have in the currency and so I think it is a clear signal from a central bank –– a reputable central bank at that, one of our partners in the region –– that, ‘look, something is not quite right in Barbados’.
“If they stop trading it is a clear signal that something is wrong. Nobody wants to stop trading in any currency to prevent business from taking place. So . . . when you take such a drastic step it is a signal in terms of a loss of faith to some degree in the currency and therefore, by extension, whatever monetary policies our country may be making in respect to its currency. And it is a blow, it is a blow,” Straughn told Barbados TODAY
Guyana’s central bank last month temporarily halted trading in currencies from Barbados and Trinidad and Tobago to ensure local supplies were not threatened.
In making the disclosure the bank’s governor Dr Gobind Ganga also dismissed worry that the foreign currency demand in Guyana was approaching a chronic stage.
The Central Bank of Barbados has so far refused to comment on the matter.
Straughn, a candidate for the Opposition Barbados Labour Party in the next general election, explained that any business conducted in Guyana by Barbadians would now have to be done in United States currency. This, he said, was likely to place additional pressure on the central bank and the Ministry of Finance to protect “whatever little foreign exchange” was left here.
In addition, recalling that some years ago Guyana had invited Barbadians to invest in that country, the former central bank research officer said the currency situation might present a challenge for those who already invested there.
“Guyana was prepared to hold Barbadian dollars, which they no longer want to do. It means that any investment that anybody wants to make in Guyana . . . you have to go now and seek said foreign exchange from the Central Bank of Barbados in order to do that as opposed to moving Barbados dollars to Guyana,” Straughn explained.
Up until the time of publication, Barbados TODAY had not received a promised comment from the Guyana central bank.