Georgetown; – At the opening of the local currency trading market this morning in Guyana, statistics has shown that the value of the Barbados dollar and the Trinidad dollar have already lost around 0.09% and 1.2% of their respective value against the Guyana Dollar within the first hour of trade.
Both currencies value began to nosedive domestically after the Bank of Guyana reacted to an increase trend which showed that traders from both Caribbean States were dumping their currencies into the Guyanese financial system in exchange for hard to get US currency.
So with a noticeable inbound increase of both Barbados and Trinidad dollars in its coffers, and an ever expanding outflow of the US currency, the Bank of Guyana made a decision less than 24hrs ago to stop buying either currency from local commercial banks or private license currency traders.
As a result, local banks and traders are no longer accepting the Barbados or TT dollar, which has now created a slowly building glut of both currencies that may eventually become stuck in the hands of many businesses and travellers who would eventually become desperate to exchange both currencies for lesser than its international market value if necessary.
And while this may be good news for black market currency hucksters or hoarders, it will definitely be bad news for both countries economies since businesses from Barbados and Trinidad will only be able to buy from Guyana with the US dollar which is already hard to get in heavy trading quantities from the local banks in Trinidad or Barbados.
As such, financial experts are of the view that a three-way trade contraction can be expected as Guyana would end up exporting less to both countries which will in turn see those countries exporting more but for a lesser value, since Guyanese businesses are still able to pay for goods and services from Barbados with the US currency.
On the other hand, industry insiders are of the view that while Barbados and Trinidad may face some short term squeeze as a result of Guyana’s currency plug decision, it can still have some negative trading impact on Georgetown in the long term, unless all three countries can come up with a common solution before the second quarter of 2017.
Guyana remains one of the biggest regional hard currency trading partner for both countries, which often see Guyanese businesses and importers pouring millions of US dollars into the Barbadian and Trinidadian economies.