I have read several news stories and letters over the years in SN on the subject of the decline of Foreign Currency Reserves. I have also met several Guyanese businessmen who have experienced difficulties – not being able to pay for imports because of the lack of FX reserves at the Central Bank. The businessmen have a lot of Guyana dollars, but because of other economic issues – more imports than exports, negative balance of payments, etc. – the nation does not have an adequate supply of FX reserves. So, it seems to me the question suggests itself: Why not use a single currency – an internationally acceptable currency?
We live in a different world today compared to prior to the 1970’s. Guyanese travel abroad in larger numbers today and need an internationally acceptable currency as soon as they step out beyond their borders. Save them the hassles of buying and selling currencies. Guyana will be flush with oil money for the next 30-years – there will be no shortage of FX. Now is the time to legislate laws and change over your National Accounting Systems to accommodate the change.
One major function of the Central Bank is to control/regulate the money supply to deal with issues of recession and inflation, but these issues can easily be dealt with by varying the rates of national compulsory savings schemes and NIS deductions from employees’ paychecks. Lower the rates when you want consumers to have more spending money; raise the rates when you want them to spend less.
I ask a simple question. Why not adopt the USD as Guyana’s only currency? What could be the arguments against doing so? Someone please educate me on this subject.