B-FXITT slows slide of J'can dollar, says Wynter
Declaring that the Jamaican dollar has depreciated by only 1.0 per cent for the 12-month period up to October 2 this year, Bank of Jamaica (BoJ) Governor Brian Wynter said that the central bank is reaping positive results from the Bank of Jamaica Foreign Exchange Intervention and Trading Tool (B-FXITT).
In a presentation to the Public Administration and Appropriations Committee (PAAC) of Parliament yesterday, Wynter said that the 1.0 per cent depreciation of the dollar up to early October compares with 7.6 per cent for the similar period last year.
Multiple price mechanism
According to the central bank governor, B-FXITT is a rules-based competitive multiple price mechanism used by the BoJ to buy from and sell to authorised foreign exchange dealers and cambios.
He said that this arrangement does not directly affect transactions by members of the public with their authorised dealers or cambios, which continues as before.
"Significantly, we have at last moved from the one-way market - the slide in the dollar - to a two-way market. The dollar goes up and it goes down. This can occur, and is occurring, when the exchange rate is in the zone of what we would call fairly valued," said Wynter.
Arguing that the exchange rate is fairly valued, the BoJ boss said that the Jamaican dollar appreciated on 66 separate days over the first half of this fiscal year, while depreciating on 60 separate days in the first half of this year.
He said for the similar period in 2016-2017, the dollar appreciated on just 25 days during that year, while depreciating 104 separate days over the period.
Wynter suggested that the macroeconomic stability in the economy is a contributory factor to the stability in the exchange rate.
He said that the BoJ has seen an increase in the volumes of foreign exchange being traded since the introduction of B-FXITT and other reforms accompanying it.