BOJ, Foreign Exchange And The Jamaican Dollar

The Minister of Finance and the Public Service, Dr Nigel Clarke believes that the decline in the Jamaican dollar does not warrant us e of public funds to fix the issue. According to him, using these funds from the national reserves might deplete resources and affect the economy.

“With approximately US 3.6 Billion in gross reserves, if it so chose, probably has enough resources to keep the currency in a very narrow band for, maybe, a few years by stepping into the role of th market and resolving temporary demand or supply balances through excessive intervention,” he pointed out.

Just recently the Bank of Jamaica disclosed that the temporary foreign exchange was not indicative of a shortage for the Jamaican economy.

Dr Clarke says, “the reserves in the central bank are a public resource and belongs to all Jamaicans.”

He goes further to note that, “We need our reserves to protect us against shocks in the external environment.”

However, one Economist, Ralston Hyman, believes that greater focus must be on increasing exports as Jamaica does not receive as much foreign exchange as it uses. He believes that this can contribute to improving productivity levels and fixing the monetary transmission mechanism.

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