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[Editor’ s notes: The numerous typographical errors in these meeting notes have been corrected.]
March 24
Deb Touchette
Monetary Information: Guyana Cooperative Bank: Visited by Sharon A. [Amos], Tim Carter, Karen Layton, Richard Janaro & Deb T.
We spoke [hole punch deleted word] the General Manager, he said, if Guyana [hole punch deleted word] to devalue the exchange rate would change. At this point it is fixed. He said the Guyana dollar is not too stable. Sharon asked what securities were there in Guyana? He said we could buy government securities (referring to bonds). I asked him about a fixed account, frozen at the exchange rate when the account was open. He said they had fixed accounts at 5.5 percent, but they were still effective [affected] by any evaluation. Sharon asked about purchasing an object outside of Guyana, registered
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outside of Guyana, when the seller is Guyanese? He said, “In a case where a Guyanese would prefer to have funds abroad, we can do that, but Guyanese are not allowed to have accounts abroad unless it is declared, but the problem lies with him, it’s not your responsibility. He said, “Bonds or a fixed income were securities in terms of Guyana money. Banks used to hold funds at the exchange rate in foreign currency in speculation of change, but that’s not done anymore,” he said. Hardly any room for speculation, only 50.00 Guyana dollars are allowed to be sent out per year as a gift, he said. To walk out of the country (airport), you can only carry 15.00 Guyana dollars without special permission from the bank. He said we should see Mr. Padmore or Mr. Fraser in the exchange control department at the Bank of Guyana. He didn’t think the IMF would alter situations much, and didn’t think it would interfere with the exchange control rate, the funds would be kept in. Guyana has certain conditions they have to satisfy (referring to the IMF) redeployment, all of that was part of the conditions being laid down. They felt Guyana wasn’t making practical use of the available skills. He said when a country devalues, they must be certain there will be an increase in production, production is falling in sugar, bauxite, rice, We wouldn’t benefit by a devaluation. One US dollar gives 2.56 Gy dollar, one pound sterling you get 4.50 gy. Should it devalue more it would be 6, something per pound sterling and that would mean more dollars in circulation. But Guyana would prosper if there was a production increase. As it looks Guyana will not come out. He didn’t see any production increase. Tim pointed out that Jamaica was told to devaluate, the IMF demanded it. He agreed that was true, said Jamaica’s situation may be different from ours. He said, “They may be exporting more, showing tendencies for increase in production. Foreign investments is one of the conditions the IMF would require. He said he saw no outward indication the government would give up on their stand previously made. He would like to believe each country is treated separately.
Bank of Guyana: Visited by Richard Janaro, Karen Layton, Deborah T. & Sharon Amos. Richard asked about setting up an external account? (He didn’t realize we had one already) Mr. Fraser said, “Why don’t you hold it in US dollars? This is my advice. There’s no regulation in speculation of devaluation in Guyana. Sharon asked what the regulations were on purchasing outside the country (referring to the boat), although she didn’t mention the boat. He asked us, “like a ship for an example? It has to be an investment and/or it has to be approved. A sale has to be done locally. If it’s investment, say like the IMF… If buying outside the country, you have to get an import license to bring things in, probably paid duty from external account. If it’s a situation of funds in another country, the purchase is made and brought to Guyana. You still need an import license. If you’re buying from Guyana outside, it’s ticklish. If the object is owned by a Guyanese and funds are made by the boat, the funds should be brought in. It’s the law. It’s a domestic purchase, he must be paid in Guyana currency. It’s illegal for a Guyanese to hold an account outside the country. There may be one or two situations but it’s unusual. We would have to check it out if the person said he had permission. He sent investment of funds is a security measure. Treasury bills – a one-year thing at 8%, it’s almost the safest thing. Sharon asked where we should do this at. He said any one of those commercial banks. You won’t have to worry about not getting paid on that. [Three words overstruck by type] If it’s in US dollars, you should get permission in order to receive it without any trouble when it matures, you won’t have any trouble getting it in US dollars, applied to Guyana Bank.
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Mortgages, there’s investment in house buildings, 4 to 5%. They’ve been doing that for a long time, it’s expanding there all right, check it out. They make Agricultural Loans. They can lend to farmers because no one can come back the next year and ask for it. Sharon asked if he thought there would be a devaluation at Guyana. He said he wouldn’t know if devaluation would happen, it would be a secret. There would be some stipulation. Its devaluation is something always considered. That is something I can’t answer.