PARAMARIBO, Suriname, CMC—The Central Bank of Suriname (CBvS) says it has sufficient foreign exchange to defend the exchange rate should it be pressured due to the high demand in the market.
CBvS Governor Maurice Roemer told a news conference that the agreement with the International Monetary Fund (IMF) regarding the measures taken to ensure economic recovery in the Dutch-speaking Caribbean Community (CARICOM) country includes provisions to defend the exchange rate.
“An attack from one party will no longer be possible as it currently works in the market,” the Governor said, noting that people who need foreign currency can no longer go to the CBvS as was the case years ago but have to go to the cambios or commercial banks.
Roemer and Finance and Planning Minister Stanley Raghoebarsing are pleased that foreign currency exchange rates have fallen and have been fairly stable for over a year.
The exchange rate for the US dollar currently fluctuates around SRD33. Raghoebarsing believes it could be a little lower even as the authorities acknowledge that the rate must not be too low; otherwise, Suriname’s competitive position will worsen compared to other countries.
Roemer told reporters that there is enough foreign currency at the CBvS to defend the existing rate?, noting that the CBvS currently has a currency reserve that can cover more than six to seven months of exports. The minimum standard is three months.
According to the Governor, the country currently has sufficient income from export proceeds, among other things, reiterating that “an attack on the rate is no longer possible.”
He said that if there is a high demand for foreign currency in the market at a given time, the central bank can intervene based on provisions included in the agreement with the IMF.
“There are rules for that. This can be done daily, but it can also be done in a different way of intervention,” said Roemer, explaining that in the past, demand on the currency market was high due to delays in payments to Surinamese importers.
He said that this made foreign exchange scarce, and importers were willing to pay much more than prevailing rates to meet their currency needs for new imports.
Raghoebarsing said he expects traders to reduce the prices of goods in the coming days, as the rate has stabilized for months and several import cycles have already passed.
He believes that, with lower prices, they will still be able to make good profits without unnecessarily raising the prices of their products.
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