Suriname - Money

The withdrawal of Dutch support in 1982 forced the government to meet its budgetary shortfall by borrowing on the domestic market, diverting credit from private investment. The strain on the money supply sent inflation into triple digits. Brought briefly under control in the 1990s, the deficit began to increase again, and in 1999 it reached an estimated US$52.6 million, or 16 percent of the GDP. Debt has also climbed as the government substantially expanded its spending on the transportation infrastructure in the late 1990s. The debt rose from US$154 million in 1996 to US$282 million in August 2000. One of the consequences has been the separation of Suriname's currency, beginning in late 1998, into parallel markets, with its bank valuation falling well below the official exchange rate. The result was a 40 percent de-valuation in January 1999 to SG998 per U.S. dollar. With the discovery of the disappearance of the country's gold reserves in October 2000, the rate fell even further, to SG2,200 per dollar. Inflation rose rapidly, increasing by 9 percent per month through 1999, and peaking at 126.7 percent in October 1999 before dropping back to 38.1 percent in June 2000.