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JAMAICA | BOJ not the cause for depreciation of the Jamaican dollar says Wynter

Featured Governor of the Bank of Jamaica Brian Wynter Governor of the Bank of Jamaica Brian Wynter
KINGSTON, Jamaica August 3, 2018 - Governor of the Bank of Jamaica Brian Wynter has denied suggestions by the Opposition spokesman on Finance  Mark Golding, that the Bank of Jamaica may be deliberately depreciating the dollar in order to manipulate the inflation rate.

Speaking on RJR's Hotline programme hosted by Emily Shields, Wynter emphatically denied that the Bank of Jamaica has been a player in the foreign exchange market resulting in its continued depreciation over the past few weeks.

The BOJ Governor argued that while it is true that the bank is buying the US currency, "it is wrong to characterise (the situation) as Bank of Jamaica driving the rate up."
 
In fact, he said, the bank has reduced the surrender or the amount that it buys each day from the market by 10 per cent, effectively allowing the market to have $60 million available to it every month that the bank does not purchase. 
 
Mr. Wynter also insisted that the BOJ is not using the foreign exchange rate to achieve a higher inflation rate.

He pointed out that the movement in the exchange rate has been a feature of the B-FIXITT system Foreign Exchange Intervention Trading Tool,  a rules-based competitive multiple-price FX tool that is designed to improve the Bank’s interaction with authorised dealers (ADs) and cambios for buying and selling foreign exchange.

The People's National Party (PNP) earlier this week, wanted to know whether the Bank of Jamaica (BOJ) was deliberately depreciating the Jamaican dollar in what amounts to be an increasingly failed effort to meet its 4 to 6% inflation target for this fiscal year. 

A media release from the PNP argued that  "repeated platitudes about the normal interaction of supply and demand in setting the price of the USD in a free market were not helpful, and did not explain why the BOJ was buying aggressively in a tight market and depreciating the currency by over 6% in three months at a time when Jamaica is substantially ahead of its reserves target."

The Opposition questioned whether a main reason behind the currency slippage had been the BOJ’s inflation target of 4%-6% for this fiscal year? This target is not being met, as inflation for January through June was negative 0.3%.

The Opposition noted that it was being said that there was some discord between the BOJ and technocrats within the Ministry of Finance over setting such a high inflation target for this fiscal year, in which the BOJ prevailed.

 

Last modified onFriday, 03 August 2018 23:52
  • Countries: Jamaica

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