Haiti – BRH : 165 million dollars wasted on the foreign exchange market
05/04/2021 10:32:02
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During the first 3 months of the year the Bank of the Republic of Haiti (BRH) injected 165 million dollars into the foreign exchange market (150 million in January and February) and 15 million in early March.
Once these injections were carried out we could see that the exchange rate which climbed at a dizzying pace was able to regain a certain stability but, once the two amounts in question had been mopped up, in the days that followed we could see an upward trend in the exchange rate and/or the stability of the Gourde could not be held in the long term, explains economist Michaëlle Paraison
According to Paraison “It is high time for the monetary authorities to know that the injection made on the foreign exchange market cannot provide a lasting solution to the overheating problem given the rise of the US dollar against the Gourde, and each time there is overheating we will be in a perpetual restart which will only generate results in the very short term so it is only waste.“
Parison underlines “today the proof is great we need 78.87 Gourdes to acquire 1 US dollar on the formal foreign exchange market and/or 98.00 Gourdes to acquire 1 US dillau on the informal foreign exchange market, therefore, despite the interventions of the monetary authorities exchange rate keeps climbing the ranks. Injection is not the right solution at momentum.”
The economist Paraison suggests opting for a total stabilization approach for the Gourde based on 5 points:
- Make the Gourde the only currency in circulation in Haiti;
- Increase national production;
- Establish the competition authority, the market policeman, and the financial market authority;
- Have a better mastery of the operating mechanisms of the informal foreign exchange market which to date represents the Achilles heel for the BRH;
- Get out of the political crisis and curb Speculation and Corruption
Believing “Once these 5 points have been implemented, we can expect a culture of results, provided that the actors concerned fully play their role.”
HL/ HaitiLibre
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