The previous five columns explored several recent developments in the foreign exchange market. They explained that the present depreciation of the exchange rate cannot be separated from common economic events – that show up in the aggregate economic statistics – affecting peoples’ lives on a daily basis. The columns underscore that the macroeconomic picture is wobbly, and as a result the adverse sentiments are being priced into the FX market. This is reflected in weak demand for machines and other intermediate goods needed to keep people producing and employed. The essays also observed the precipitous decline in foreign investment and overall private investment.
We concluded that there is little evidence to indicate that there is a slowdown in the underground economy as evidenced by the persistent increase in the use of cash for payments compared with bank deposits. However, we saw that Guyanese are reducing their demand for bank deposits or money,
