Guyana's Natural Resource Fund Act 2021 requires petroleum revenues to be paid directly into a United States dollar account held as part of the Fund, and requires the Fund's investments to be in foreign assets. Money can leave only through a withdrawal the National Assembly approves in the annual budget, capped by a schedule in the Act. So the receipts do not automatically become domestic spending or domestic money.
Guyana had no offshore oil production at all until the end of 2019. Within five years it was one of the fastest-growing economies in the world. A windfall that size does not reach a small economy as a number in a budget. It reaches it as a wall of foreign currency, and what a country does with that currency in the first instance is a decision written into law.
Key Takeaways
- ExxonMobil announced a significant offshore find in May 2015, and production began at the end of 2019.
- The Natural Resource Fund Act 2021 requires petroleum revenues to be paid into a United States dollar account held as part of the Fund.
- The Act requires the Fund's investments in bonds, equities and commodities to be held in foreign assets.
- Money leaves the Fund only through an amount the National Assembly approves, capped by a formula in the Act's First Schedule.
- The arrangement changes the timing and the decision route of the spending. It does not remove the pressures a resource boom creates.
How quickly did the oil actually arrive?
The IMF's 2025 Article IV consultation report sets out the sequence. Oil exploration offshore Guyana began in earnest in the early 2000s, but the first significant discovery came in May 2015, when ExxonMobil announced a find at the Liza 1 well, about 120 miles off the coast. Production started at the end of 2019.
The US Energy Information Administration, writing in May 2024, dates the same two events to 2015 and 2019 and puts output at 645,000 barrels a day in early 2024. It also records that Guyana raised production by an average of 98,000 barrels a day each year from 2020 to 2023, which made it the third-fastest-growing producer outside OPEC over that period.
The effect on the national accounts was correspondingly abrupt. The IMF reports real GDP growth of about 43.5 per cent in 2024, after nearly 34 per cent in 2023, with real oil GDP up 58 per cent in 2024. In money terms, the same report puts nominal GDP at G$5,141.3 billion in 2024, of which the non-oil economy accounted for G$1,793.7 billion. In other words, most of the measured economy in 2024 was a sector that did not exist five years earlier.
Where does the money go the moment it arrives?
This is the part that decides how a windfall interacts with a currency, and in Guyana it is set out in statute rather than left to practice. The route a dollar of petroleum revenue takes is written provision by provision.
| Provision | What it requires | Where the dollar sits after it |
|---|---|---|
| Section 15 | Petroleum revenues paid directly into a United States dollar account held as part of the Fund | A United States dollar account |
| Section 3 | The Fund held in the central bank's name for the government and people of Guyana, managed separately from the bank's own reserves | Apart from the bank's reserves |
| Section 22 | Deposits with highly rated foreign institutions; any bonds, equities, derivatives or gold to be foreign assets | Invested abroad |
| Section 17 | The annual withdrawal capped by the First Schedule formula | Still in the Fund unless released |
| Section 19 | That amount put to the National Assembly in the annual budget | Released only on a vote |
| Section 16 | Withdrawals paid into the Consolidated Fund, for national development or disaster response only | Domestic spending |
Section 15 of the Natural Resource Fund Act 2021 requires petroleum revenues to be paid directly into a bank account denominated in United States dollars, held as part of the Fund. Those revenues are defined widely: royalties, the government's share of profit oil and profit gas, petroleum income tax and additional profits tax, and signature, discovery and production bonuses.
Section 3 establishes the Fund, requires it to be held in the name of the central bank on behalf of the government and people of Guyana, and requires it to be managed separately from the bank's own reserves. Section 22 then limits what the Fund may hold. Eligible bank deposits are deposits in United States dollars with foreign financial institutions carrying a high long-term rating from at least two of the three major agencies, and where the Fund holds treasury bills, sovereign bonds, corporate bonds, equities, derivatives or gold, all of those investments must be in foreign assets.
The Bank of Guyana's quarterly report on the Fund for September 2023 shows what that looks like in practice: the quarter's receipts were deposited into the Fund's account at the Federal Reserve Bank of New York, and the Fund's board had approved an investment mandate keeping the money in that deposit account.
Why does it matter whether the receipts are converted?
Oil is sold abroad and paid for in foreign currency. That currency only touches the domestic economy at the moment somebody exchanges it for local money and spends it at home.
Receipts that stay in foreign assets are, for the time being, a foreign claim. They are not local deposits, they are not local bank lending, and they are not local demand. Receipts that are converted and spent are all three. That single distinction is why the destination of the first payment is a monetary question and not just an accounting one.
The Act is explicit that this is the intent. Section 3 lists the Fund's purposes, and among them are ensuring that volatility in natural resource revenues does not lead to volatile public spending, and ensuring that natural resource revenues do not lead to a loss of economic competitiveness. The second of those is the classic resource-boom problem named in a statute.
What decides how much can be released each year?
Two provisions working together, and neither of them is discretionary.
Section 17 caps the annual withdrawal by a formula in the Act's First Schedule, applied to the deposits paid into the Fund in the immediately preceding fiscal year. As enacted in 2021 the schedule allowed 100 per cent of the first US$500 million of those deposits, 75 per cent of the second US$500 million, 50 per cent of the third, 25 per cent of the fourth, 5 per cent of the fifth, and 3 per cent of anything above US$2,500 million. The proportion falls sharply as the inflow grows, which is what makes it a saving rule rather than a spending rule.
Section 19 then requires that figure to be put to the National Assembly inside the annual budget proposal, and section 16 confines every withdrawal to the Consolidated Fund and to national development priorities or the effects of a major natural disaster.
The schedule itself has since been loosened. The IMF's 2025 report records that it was revised in January 2024 to allow larger transfers: on the earlier schedule, an inflow of US$5 billion in one year permitted a maximum transfer of US$1.35 billion the next, and on the revised one it permits US$4.2 billion. That is a large change, and it is worth noting that it was made by amending the statute, in public, rather than by changing an internal practice.
What pressures does an economy like this still have to manage?
The familiar ones, and the IMF's 2025 report devotes an annex to monitoring them.
The mechanism it describes is the standard one. A resource boom raises domestic spending, which pushes up the prices of things that cannot be imported, such as housing, construction and local services. It also pulls capital and labour towards the resource sector and towards those non-tradable activities. That is a change in the export base itself, and the export base is what decides whether a commodity-currency label fits an economy at all. Traditional exporters, who sell at world prices and cannot pass on higher local costs, are squeezed from both sides. A rising real exchange rate is the summary measure of that squeeze.
On the evidence available at the time, the report found no clear signs of this yet in Guyana, noting that the real effective exchange rate showed no strong appreciation and no break in trend after production began. It attributes part of that to the mitigating policies in place, and part to the country's starting conditions, including spare capacity in the economy. It recommends continued monitoring of sectoral indicators rather than treating the question as settled.
Does the fund remove the problem, or move it?
It moves it, and that is the honest way to read an arrangement of this kind.
Nothing about the Fund stops the money being spent. It requires that the spending be voted on, capped, and drawn from a pool that is otherwise held abroad. The IMF reports capital expenditure of more than 12.5 per cent of GDP in 2024, financed in part by those withdrawals, so the domestic demand effect is real and intended. What the statute changes is the pace and the visibility: a receipt cannot become domestic spending by default, and the amount that does is a published number attached to a budget.
That is a narrower claim than a fund of this kind is often given credit for. It is also the claim the drafting will actually support.
Where to look next
The AUD to GYD page carries the live reference rate for the pair together with a short block on how foreign currency dealing in Guyana is licensed and supervised. For the more general question of what makes an economy's currency described as commodity-linked in the first place, what it means for a currency to track a commodity sets out why the test is export concentration rather than a chart relationship.
Sources
- Natural Resource Fund Act 2021 (Act No. 19 of 2021), Official Gazette of Guyana, 30 December 2021 - sections 3, 15, 16, 17, 19 and 22 and the First Schedule: the Fund's purposes, the United States dollar account, the foreign-asset requirement, the withdrawal ceiling and the National Assembly route
- Bank of Guyana, Natural Resource Fund Quarterly Report, September 2023 - the receipts deposited at the Federal Reserve Bank of New York, and the mandate keeping the balance in that account
- International Monetary Fund, Guyana: 2025 Article IV Consultation, Country Report No. 25/103 - the May 2015 Liza 1 discovery, production from end-2019, the 2024 growth and GDP figures, the January 2024 revision of the withdrawal schedule, and the resource-boom annex
- US Energy Information Administration, Guyana becomes key contributor to global crude oil supply growth, 21 May 2024 - the 2015 discovery, output from 2019, 645,000 barrels a day in early 2024, and the 2020 to 2023 growth ranking
General information about how resource revenue is managed and what it does to an economy. Not financial advice, and not a recommendation of any product or institution. Reviewed by the Tradergy editorial team, September 2026.
Common questions
When did Guyana become an oil producer?
The IMF's 2025 Article IV report records that ExxonMobil announced a significant find in May 2015, at the Liza 1 well about 120 miles offshore, and that production began at the end of 2019. The US Energy Information Administration dates the first significant offshore discovery to 2015 and the start of crude oil output to 2019.
Where are Guyana's oil receipts actually held?
Section 15 of the Natural Resource Fund Act 2021 requires petroleum revenues to be paid directly into a bank account denominated in United States dollars, held as part of the Fund. The Bank of Guyana's quarterly report for September 2023 records that the receipts were deposited into the Fund's account at the Federal Reserve Bank of New York.
Why does it matter whether the revenue is converted into local currency?
Because foreign currency only affects the domestic money supply once somebody converts it and spends it at home. Revenue held in foreign assets sits outside the local banking system. Revenue converted and spent domestically adds to demand in an economy that may not be able to supply more in the short run.
How much can the government take out each year?
Section 17 of the Act caps the withdrawal by a formula in the First Schedule, applied to the deposits paid into the Fund in the preceding fiscal year. Section 19 then requires the amount to be included in the annual budget proposal and approved by the National Assembly. The schedule was revised in 2024 to allow larger transfers.
Does a fund like this remove the pressure on the economy?
No. It changes when the money arrives and who decides, not whether it is eventually spent. Withdrawals are spent domestically, and the IMF's 2025 Article IV report describes monitoring for symptoms such as real exchange rate appreciation and a shift of capital and labour away from non-resource tradable sectors.