Companies operating in the country are still finding it difficult to access United States dollars, although there has been some improvement.
The Chamber of Commerce, the country’s biggest business group, said yesterday it has been steadily canvassing its membership, in order to glean further insight on the US dollar foreign exchange issue and ascertain “whether or not they were still experiencing challenges accessing US dollars for their business needs”.
Chamber CEO Catherine Kumar said in a statement: “Even (yesterday), the chamber’s research team has been calling our members. What we have found, is that, month on month, there has been a general improvement, with our members telling us that they are able to get a greater percentage of their US dollar foreign exchange needs met. However, our research has shown that our members are still experiencing a shortage to meet their overall needs, with some experiencing this continuous shortage for over a year.
So what we have found is that even though companies are obtaining forex, it is not without considerable hurdles at times—including opening secondary accounts, employing currency swaps which results in paying considerably higher rates for US dollars. Notably, the category of companies that continues to be most affected by the forex issue is medium-sized companies; we have seen that the foreign exchange needs of very small companies are relatively minimal.”
She added: “There has been a continuous injection of US dollars into the banking system, with the total year-to-date figure reaching US$940 million (US$1.3 billion was injected for 2013).
Given that business growth has been minimal to date, the Central Bank needs to do a thorough analysis to determine what the exact reasons are to account for this shortage to the general business community. Without this information to properly inform the Central Bank and allow for evidence-based corrective action, it may be that pumping more US dollars into the system will not resolve the issue of unmet demand.”