Thu | Nov 23, 2017

J$ being artificially manipulated, says Shallman Scott

Published:Wednesday | November 8, 2017 | 3:15 PM

Former Mayor of Montego Bay, Shallman Scott says the current appreciation in the value of the Jamaica dollar against the US dollar has no relationship with the performance of the economy.

He says that in the face of the negative or otherwise sluggish performance of some economic indicators there is no reason for the continued positive adjustment.

“The dollar is now supposed to be revaluing but yet you have an economy that is deteriorating. There is nothing in any economic law or theory that supports that reality,” Scott said in an interview on Independent Talk on Power 106.

He contends that the appreciation is an artificial manipulation of the Jamaica dollar, noting that this is not the first time that this is happening.

 “In the 1980s, the dollar was artificially held at $5.50 to one (US dollar) for nearly nine years and in the meantime, the whole economic system began to collapse. The hospitals were closing, so too the health centres,” Scott recalled.

The former Mayor is warning that Jamaica is making the same mistake since a similar set of circumstances obtains in that there were problems in the schools and there is high unemployment especially among those in the age group 19-24.

Scott dismissed the Private Sector Organisation of Jamaica’s recent endorsement of the new currency arrangements by the Bank of Jamaica. He says the activity is masking the true picture of what is happening.

“Whatever is the talk and whatever is the endorsement, what is happening is a lot of posturing that has nothing to do with the reality of the connection between the manipulation of the currency and the performance of the Jamaican economy,” Scott said.  

The Jamaica dollar has been showing strong performance against its US counterpart recently. It traded at an all-time high of $131.31 to one US dollar on September 15, 2017 followed by a gradual correction trading at $126.91 to one US dollar on Tuesday.

- neville.graham@gleanerjm.com