Suriname’s president fires central bank governor

The government of Suriname dismissed the country’s central bank governor, Glenn Gersie, on February 12, according to an announcement from the state-run National Information Institute.

The decision took place during a tense meeting between Gersie and president Desi Bouterse and finance minister Gillmore Hoefdraad, according to regional publications. The New York-based Caribbean Life News says Gersie had refused to yield to government pressure to finance public spending ahead of elections scheduled in May 2020.

“Out of respect for the institute of the governor of the CBvS, we do not wish to enter into the details of the discontinued cooperation,” said the government in a statement. “We wish to reassure society that the government takes its monetary responsibilities very seriously.”

Gersie was appointed governor in February 2016 of the Central Bank of Suriname, a country on the north-east coast of South America with a population of around 560,000. During his tenure, he implemented a tighter monetary policy to tackle hyperinflation. Under Gersie’s leadership, the central bank increased interest rates to 25% from 12.5%.

Suriname’s exchange rate stabilised and year-on-year inflation declined from a peak of close to 80% in 2016 to 9.2% in December 2017, says the International Monetary Fund. Provisional official data placed inflation at 5.4% in December 2018.

But Suriname’s economy still suffers other imbalances. In 2018, the budget deficit was recorded at 7.3% of GDP. “The public financial management framework remains weak, although the authorities are taking steps to strengthen it,” said the IMF in its article IV consultation on Suriname in December 2018. “The monetary framework lacks standard instruments. Despite improvements since 2016, pockets of vulnerability remain in the banking sector,” it adds.

After Gersie’s sacking, the continuation of his policies may be under threat. “The merger between fiscal and monetary policy will continue unabated and the CBvS will act in accordance with its duties set out in the Banking Act,” adds the government in its statement.

Gersie had a long career in the central bank. He joined during the mid-1980s, and acted as director of monetary and economic affairs for 16 years. Gersie has also served the government on several public bodies, for instance as chair of the board of the credit guarantee fund in Suriname and as a board member of the national planning office.

Gersie holds a Master’s degree in economics and was a lecturer at the Anton de Kom University of Suriname in the 1990s.