At a press conference held by the administration, President Chan Santokhi declares that crucial decisions would be made in the government council on Wednesday. A set of actions will be implemented to stabilize the out-of-control exchange rate. There is little doubt that the monthly fuel subsidy of over SRD 400 million is unsustainable. This will be eliminated gradually. Additionally, there will be dedicated sales locations for fuel for the interior and gold industries, and border smuggling will be stopped.
The Central Bank of Suriname’s (CBvS) quoted rate for the US dollar is now higher than SRD 32. According to the bank’s calculations, this rate is a little bit too high, according to governor Maurice Roemer. Nobody gets their fingers burned trying to figure out what the ideal pricing level should be. Santokhi indicates that there will be interventions to correct the course. The Exchange Rate Stabilization Platform, on which nearly all parties interested in the exchange rate have seats, was closely consulted before these actions were made.
The president notes that these restrictions will be in effect from now until February 2023 for a period of three months. The phasing out of the subsidies will be accompanied by help for society’s vulnerable sections. The International Monetary Fund and I agree on this (IMF). Additionally, efforts are being made with the multilateral organization to have the CBvS fix the exchange rate based on a possible fluctuation range. This form was in place prior to the IMF program’s launch. The CBvS should only list the rate based on the transactions, according to the IMF, who believes that the rate should be completely free.
The Open Market Policy, which has drawn much criticism for the nearly 90% interest rates that banks get, is also being evaluated.
Important products and medications will have their importation guaranteed by the government. More stringent measures will be taken to guarantee that exporters transfer 35% of the sales profits to a reputable banking institution. The CBvS president and governor claim that the retention program is not operating efficiently. The Ministry of Finance’s direct actions also had the opposite result of what was intended. The complete implementation of the import interventions has now been agreed upon. We’ll keep a tight eye on everything.