Fri | Dec 4, 2020

Opposition wants BOJ to explain dollar slide

Published:Thursday | July 26, 2018 | 12:00 AM

Opposition Spokesman on Finance and Planning Mark Golding has called on the Bank of Jamaica (BOJ) to shed light on the recent rapid depreciation in the value of the Jamaican dollar.

According to Golding, since April this year, there has been significant volatility in the exchange rate, with the dollar falling to a new record low of J$134.05 to US$1.00 and the BOJ buying as high as J$137.00 to US$1.00 on the July 25 scheduled auction.

Golding said that the lack of communication from the central bank has left room for unhelpful speculation as to what is behind this.

He added that it is also being suggested that the BOJ is deliberately driving the fall in the currency in order to increase inflation, which, for January to June 2018, was negative 0.3 per cent and well below the BOJ's four per cent to six per cent target range.

"The BOJ needs to explain its exchange rate policy as consumers and many in the business community are now very anxious and confused. With international reserves reportedly being ahead of target, the question arises as to why our dollar has fallen over six per cent since April and is still falling. This is not the time for silence, and the BOJ must explain, clearly and openly, what is really going on."

The opposition spokesman also questioned why the Jamaican currency was under such pressure at this time, "in what remains an underperforming growth environment characterised by low aggregate demand and low inflation".