Possible recession looms for US

first_imgDear Editor,In recent days, the US interest rates have produced an inverted yield curve, which is a sign of slowing economic activity in the US economy, and this may possibly trigger a recession.For Guyana, this could be an opportunity which triggers local currency appreciation, depending on how the Central Bank and Ministry of Finance handle the US adjustment to interest rates.However, it should also be noted that if our currency and gold reserves are strengthened while simultaneously reducing our debt levels as a percentage of GDP, the opportunity to take advantage of the US economic adjustment would improve.The projected growth of our oil revenue will also substantially aid in achieving such currency appreciation (via resulting debt-to-GDP ratio reduction), and given our high dependency on foreign imports, a strong Guyanese dollar should be good for the economy, and help to keep inflation under control in the near to midterm, while global trade adjusts.The resulting increased buying power of the Guyanese dollar will also help ease the burden on local salaries, and enable households to improve their standards of living.The economy is currently experiencing high unemployment, and such an adjustment to monetary policy would have a much-awaited positive impact on the lives of many Guyanese. As the saying goes, “a little goes a long way”, and in this case, it surely will.Best regards,Jamil Changlee (Mr)last_img read more