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Guyana SERVICES
Banking
Apart from the Bank of Guyana (the central bank), five
commercial banks and two foreign banks operated in Guyana. Three
other foreign banks--the Royal Bank of Canada, Chase Manhattan of
the United States, and Barclays Bank of Britain--were nationalized
in the 1980s. The two remaining foreign-owned banks were Canada's
Bank of Nova Scotia and India's Bank of Baroda. The primary
activity for commercial banks was lending to the government;
private investment opportunities were rare. According to the
Economist Intelligence Unit, the public sector accounted for 97
percent of the financial system's claims at the end of 1986.
In 1987 the banks experienced a shock when the government
emphasized bond issues rather than borrowing from commercial banks
as a way of financing its deficits. This shift in government policy
placed the banks in a difficult position because they could make
few loans and thus few profits; there were then almost no private
entities seeking financing. But commercial banks benefited from the
government's legalization of foreign exchange trading in 1989.
Until then, the Bank of Guyana had been the only legal source of
foreign currency, forcing local banks to hold Guyanese dollars even
when a devaluation was expected. Five banks opened cambios,
or exchange houses, in 1990.
Data as of January 1992
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