The Bank of Guyana has issued a warning to a money transfer service that operates under a Trinidadian group of companies about its foreign currency financial transactions in Guyana.
The move came after it was discovered by the Central Bank that the company may not have been following local foreign exchange and banking laws in relation to millions of U.S dollars that it would have earned through its money transfer business.
News Source understands that the company may have starved the local banking sector of well over US$17 million.
The Laws of Guyana require money transfer services to sell their foreign currency balances to licensed financial institutions.
The Bank of Guyana reportedly uncovered evidence that the money transfer company was not selling all of its foreign currency balances to licensed financial institutions but rather was using it to channel to the other companies that fall under the same Trinidadian Group of Companies.
Finance Minister, Winston Jordan, today told News Source that the Bank of Guyana has dealt with the matter and the company was warned. He said it was more of a warning than a sanction.
Earlier today, Minister of State Joe Harmon, announced that the Bank of Guyana was moving to put stricter monitoring in place to address foreign currency issues in Guyana.
The Bank of Guyana will be issuing a number of guidelines with regards to the new regulations and monitoring.
The guidelines will ensure that exporters repatriate their export earnings to the banking system as required, conduct close monitoring and examination to maintain orderly behavior and stability and ensure that all foreign loans and grants are issued and disbursed on time. The latter, the Minister explained, will ensure increased flows of foreign currency locally.
This will see the Bank of Guyana strengthening its capacity to ensure that regulations are followed by all financial institutions.
A Bank of Guyana source told News Source that the situation with the money transfer company may have triggered unease in the foreign currency market locally, resulting in fluctuations in the purchasing and sale prices for US dollars and that may be the reason why some commercial banks would have been complaining about a possible shortage.
Additionally, the source said, Guyana is surrounded by a number of countries that are all going through a foreign currency crisis and companies from those countries may be making attempts to buy out more foreign currency from Guyana.