Suriname's exchange rates rose sharply again this week. The U.S. dollar recorded a buying rate of SRD 38.50 on Tuesday and sold for more than SRD 39. The euro continued to rise above SRD 44. This sharp movement in the foreign exchange market does not stem from economic downturns, but from something more fundamental: uncertainty about policies to come.
According to Steven Debipersad, president of the Association of Economists in Suriname (VES), the economic fundamentals have not deteriorated per se. "We don't see any acute negative trends. The underlying numbers are fairly stable. But the market has no idea what direction policy will take. And that is exactly what savings, investment capital and trade money is reacting to: uncertainty."
In the days surrounding the election, that uncertainty escalated. Market players tried to secure their assets by hedging with foreign currency. The result: an accelerated rise in the exchange rate, which can now be felt in virtually every sector of society.
In the agricultural sector, the effects are already immediately visible. The price of fertilizer rose from SRD 1,100 to SRD 1,535 per 25 kg bag in a matter of days. Chicken manure went from SRD 600 to SRD 750. Farmers are sounding the alarm. "If we don't know what to expect, we can't plan either. And then it's the end of the road," says a farmer from Saramacca Polder. Many are now considering switching to construction, where profit margins are slightly better for now, although there too costs are rising rapidly.
Tenants whose contracts are in foreign currency are also hit hard. "I pay in euros, but earn in SRD. Because of the exchange rate increase, I suddenly have to find thousands of SRD extra," says a young family from Paramaribo.
Although the Central Bank of Suriname (CBvS) and the Ministry of Finance and Planning have indicated they are monitoring the situation, there has not yet been a clear signal on policy during this transition period. And that is precisely the problem, Debipersad stresses: "The market hates uncertainty. And without clear direction, speculation comes first. That pushes the price up regardless of what the facts say."
The CBvS still held a currency auction of US$ 15 million on May 29, but according to Debipersad and other economists such as Winston Ramautarsing, such interventions are only temporary in nature and can even be counterproductive if misused. "We have limited reserves. Any action must be targeted and prudent," Debipersad said.
His advice to the incoming administration is clear: Come quickly with transparency. "Show what course you are taking. Show that there is vision, policy, responsibility. Because only when people believe that will they stop fleeing in foreign currencies."
Until that happens, the price movement will remain not just a number on a screen, but a daily slap in the face of farmers, builders, renters and consumers.
