Guyana loses confidence in Barbados dollar – Straughn

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.

8 Responses to Guyana loses confidence in Barbados dollar – Straughn

  1. David Wyndoze
    David Wyndoze January 14, 2017 at 7:23 am

    When GUY loses faith in your money
    – that’s when it’s bad!

    *Bajan hangs head in shame*

    Reply
  2. Hal Austin January 14, 2017 at 10:41 am

    The Barbados dollar has had an enormous internal devaluation, despite the falsity of being pegged to the dollar.
    Prices are shooting up almost every day, real incomes are have to a halt, even though the unions are calling for daily pay rises and people are just not feeling better off.
    We have now reached a state that the Guyana dollar, which we thought was monopoly money a few years ago, is now losing confidence in the Bajan.
    Heads must roll.

    Reply
  3. Carson C Cadogan January 14, 2017 at 1:07 pm

    So Ryan, I can take it that the Guyanese have lost confidence in the Trinidad dollar as well?

    Since they have stop trading in Trinidad dollars as well?

    Your political slip is showing.

    Reply
  4. Foolbert January 14, 2017 at 4:12 pm

    Ironic that the (so far) successful US Federal Reserve Bank policy of creating unprecedented amounts of debt-free money liqudity via QE is OK for them (and more recently other countries) , but not for CARICOM nations.
    For the last ten years the US has been warned of devaluing their own currency through QE (which in part is what they wanted), yet the Green Back is stronger today than when QE began.
    No one (not even the Guyana Central Bank) should presume to know to outcome, and one should remain aware of the possible economic and social impact of NOT providing liquidity when it is needed. It is quite possible Barbados is willing to allow the possibility of devaluation if it comes to that rather than force a social crisis.

    Reply
  5. RC January 14, 2017 at 5:06 pm

    I have a question, Ryan and Co as I am not very intelligent. How many years has it bean since Barbados stopped trading in the Guyana dollar?

    Reply
  6. Barber January 14, 2017 at 7:05 pm

    The question you should ask is when was the last time Guyana stop trading in our dollar and you would see it was in 1993 and we all know what happened in 1994………. And restarted in 1996

    Reply
  7. Carson C Cadogan January 14, 2017 at 8:49 pm

    “Donald Trump Gets Something Right: The US Can Avoid Defaults by Printing Money”

    Trump critics are crowing, accusing Trump of being ignorant of economics. There’s a lot of reason to think that Trump doesn’t know his economics (such as the outlandish tax plan he proposed). But this time Trump is right–the government really can avoid defaults by printing money. Here’s how.

    The United States has its own currency, the US dollar. This means that it has full control over its own monetary policy. Monetary policy is generally governed by the Federal Reserve, which can set its own interest rates and expand or contract the money supply at will. The Federal Reserve board is appointed by the federal government–the president nominates people to the board and they are confirmed by the senate. The Fed’s mandate and structure can also be changed via legislation. So there are ways for a determined president and cooperative congress to control the Fed. It’s also possible for the government to use a loophole in an old piece of legislation to directly mint coins of any value. This was discussed back in 2013 as a possible way to circumvent the House Republicans in the debt ceiling fight.

    So there’s no doubt that the government could print a bunch of money and use it to pay down its debts. But you may be wondering about inflation–wouldn’t printing a lot of money lead to hyperinflation? This is an oversimplification. Printing money can lead to inflation, but only when the economy is operating at capacity. When the economy is operating below capacity, printing money acts as stimulus and may not have any direct effect on inflation at all.”

    JUST LET THAT SETTLE IN Ryan.

    Reply
  8. F.A.Rudder January 17, 2017 at 3:46 pm

    Can’t you see why? Look at Detroit sub-divisions, parts of Puerto Rico network, and some other U.S.A small towns! We have to be “united we stand divided we fall”! Barbados still have good planners but they are mostly conservative. We had hard times from Cromwell and we overcame those hardships so to the world don’t think that we just curl up and die neither will we be railroaded. We will survive by principal and stalwart ingenuity!

    Reply

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