Foreign exchange crisis looms
There appears to be an impending crisis in foreign exchange supply in Guyana because of falling production and prices in the gold sector. The Guyana Government is encouraging miners to produce more. And now the President is saying that there is hoarding. However the hoarding may have started with the Guyana Gold Board itself that bought a large amount of Gold when the price was high but held on to it even as the price plummeted.
The sector contends that it has been producing in the same manner however gold declarations have declined. There is concern too that more lands need to be open for mining.
The decline is likely to have an impact on Guyana’s foreign exchange earnings since it would result in a shortfall by nearly one third of what was projected.
Former Commissioner of GGMC William Woolford feels that it is not in the interest of any gold miner large or small to hoard gold since the world market price has been declining.
However this newscast understands that the gold mining work-sites may be paying for its operations in Gold and since the Central Government indicated that fuel can be traded at border post payment for the fuel is being conducted in gold.
The large gold traders are denying that they are “hedging” with Gold, meaning that they are being speculators waiting for the price to increase. Only one trader and the Guyana Gold Board did that in recent time and it is still unclear what became of that quantity of gold and the impact on the National Treasury.