Shaw Says All In Place
Finance and Planning Minister Audley Shaw is calling for a halt to recent speculative pressures on the Jamaican dollar. He says the recent depreciation in the value of the currency is unwarranted, especially in light of availability. He says there is no reason for recent increased demand.
"The foreign exchange market needs to settle down. We need to stop speculating. We need to stop panicking. There is no shortage of foreign exchange in the system," Shaw said as he addressed the breakfast launch of the programme, Promoting Financial Inclusion in Jamaica through Financial Empowerment & Technological Awareness at the Jamaica Pegasus Hotel, New Kingston this morning.
The weighted average rate of the Jamaican dollar closed at $130.52 to the US dollar in trading on Monday. That was better than the $130.81 close last Friday, and $131.22 at the close of trading on September 14, 2017. Shaw says that despite recent movements the exchange rate of the Jamaica dollar vis-a-vis the US currency has settled down. He says Bank of Jamaica Governor Brian Wynter and the central bank are putting in place an orderly process of ensuring that information flows throughout the system of demand for foreign exchange.
The Finance Minister stopped short of saying what will be done about the speculative pressure, but says Jamaican dollar depreciation helps no one.
"I am calling on every Jamaican and every businessman and every banker to stop it. Stop it! Settle down. Keep our exchange rate stable because those that suffer the most are honest hard-working people of Jamaica," Shaw implored.
Shaw also said that the Ministry has put Jamaica on a path to having single digit interest rates for the productive sector, noting that he is supporting the call from Jamaica Manufacturer's Association president Metry Seaga for interest rates that are in the region of five per cent.
He said there was no reason for banks to continue to exact high-interest rates since the international bond market has signaled its appreciation that Jamaica's sovereign debt is at investment grade rather than the near junk bond status of a few years ago.
"One of the things that will have to ensure as we move to a more formal economy is to create greater access to single-digit interest rates," the Minister said. "That is a major part of the financial inclusion strategy that we must have. So the more formal you get, the greater will be the access to cheaper money," Shaw said.