100 Dollars (Republic) – Guyana

In 2020, Guyana's currency situation was characterized by a managed exchange rate regime for the Guyana Dollar (GYD) against a backdrop of significant economic anticipation. The official exchange rate was pegged by the Bank of Guyana, trading within a narrow band around GYD 209 to US$1. However, a persistent and substantial parallel market premium existed, where the US dollar traded for as much as GYD 230 to 240, reflecting underlying market pressures, limited foreign currency liquidity in the formal banking system, and historical public distrust in the local currency. This gap highlighted structural issues, including reliance on imports and past episodes of high inflation, which drove demand for more stable foreign currencies.

The defining economic event shaping the currency outlook was the commencement of crude oil production in December 2019, just before the year in focus. By 2020, Guyana was on the cusp of a transformational economic shift, poised to become a major oil producer. This prospect led to expectations of future foreign exchange inflows and potential currency appreciation. However, these were early days, and the immediate currency market had not yet felt the direct impact of oil revenues, which were still in their infancy and subject to complex profit-sharing agreements and a sovereign wealth fund (the Natural Resource Fund) that was not yet operational for budgetary support.

External shocks further complicated the 2020 landscape. The COVID-19 pandemic caused a global economic slowdown, disrupting traditional sectors like gold mining, sugar, and rice, which were key sources of export earnings. This threatened to exacerbate foreign currency shortages in the short term. Consequently, monetary policy focused on maintaining stability, with the Bank of Guyana holding its key interest rate steady for much of the year to support credit and manage inflation, while cautiously managing reserves. The overall currency narrative in 2020 was thus one of a system under existing strain, but poised at the threshold of a potential new era driven by oil, with its full implications for the Guyana Dollar yet to be realized.