JN Money Service hit by USD shortage in Cayman
With contracting US dollar supplies now facing The Cayman Islands, the Jamaica National Building Society says it has seen diminishing remittance activity through its JN Money Service (JNMS) subsidiary there.
"Our September report indicates that there has been a decline in the number of transactions and the value of remittances sent by our customers," JNMS general manger Leesa Kow told Wednesday Business via email.
She said that since the JNMS was forced to implement a USD-only transaction policy following the closure of its bank account with Cayman National Bank, "Our customers have not been able to readily access US dollars from local banks."
As a result, Kow added, some customers have been remitting smaller sums, while others have chosen to do fewer transactions.
The USD cash flow problems in The Cayman Islands heightened in recent months as money-transfer agencies were advised to only accept USD to transact business. It has led to supply and demand challenges for Cayman banks and has created a quandary for some migrant workers who cannot source the volume of funds they normally send back home.
JNMS itself made the switch in August for transactions through its MoneyGram and Quick Cash services. The company operates two money transfer branches and a network of nine agents in the Cayman Islands.
Cayman banks have been shedding their money-transfer clients in response to correspondent banking concerns about the risks of money laundering.
A Jamaican working in Cayman, who spoke with Wednesday Business, bemoaned the scarcity of US currency, saying it was affecting her ability to pay bills in Jamaica. The person, who asked not to be identified, said some banks in Cayman are also charging fees of up to CI$50 on USD purchases, levied against customers who do not hold accounts with them.
"This means you get less because you now have to find extra money to pay to buy the USD. That could go towards what you need to send home," she said. Additionally, customers are placed on a waiting list for USD purchases.
Cayman reports further indicate that the number of banks that sell USD to account holders only is growing.
The Cayman Islands Monetary Authority (CIMA) says it has detected no shortage of currency; however, Cayman's Financial Services Minister Wayne Panton has acknowledged that there is a problem and has said a resolution to the cash shortage is near.
Demand for USD from migrant workers is also said to be driving up exchange rates and fees. Jamaican sources say they are currently paying around CI$0.84 for each USD in the banks and CI$0.89 on the black market.
CIMA data indicate that remittance outflows from Cayman amounted to US$6.49 million in 2014, of which US$951,000 was sent to Jamaica. It was second only to the US$3 million sent to the United States.