Wed | Aug 16, 2017

Dollar slide worries JCC

Published:Saturday | May 21, 2016 | 5:00 AM

 

The Jamaica Chamber of Commerce (JCC) has said it is concerned about the pace of the devaluation of the Jamaican dollar.

In a media release issued yesterday, the JCC stated: "At January 1, 2016, the average rate was US$1 to J$120.24. At May 19, 2016, this had declined to US$1=J$125.33, representing a decline of 4.2 per cent since the beginning of the year. This, compared to a decline of 4.2 per cent for all 2015 (from US$1=J$115.32 at the beginning of January 2015 to J$120.24 at the end of the year) is, in our view, cause for concern."

The JCC continued: "Jamaicans were advised by the authorities at the end of 2015 that the exchange rate of approximately 120:1 was a competitive one, with respect to our main trading partners. In that context - and in light of the fact that our inflation rate has been below three per cent for the 12-month period ending on May 19, 2016 has remained under three per cent and our Net International Reserves showing a healthy US$2.4 billion - there seems little apparent reason why the pace of devaluation has increased."

THREATENING CONFIDENCE

The release concluded: "Our concern is that if this rate of devaluation is left unchecked, it could contribute to an erosion of confidence, which could in turn contribute to further devaluation, increased inflation and prove to be a damper on investments.

"The JCC is, therefore, calling on the BOJ (Bank of Jamaica) to play a more active role in the management of the exchange rate, including direct intervention, as a matter of urgency."