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Amended BOJ Act to modernise central bank in keeping with international best practices

Published:Tuesday | October 23, 2018 | 12:00 AMMcPherse Thompson

Finance and the Public Service Minister Dr. Nigel Clarke yesterday tabled the Bank of Jamaica (Amendment) Act 2018, which seeks to modernise the central bank in keeping with international best practices.

The Bill seeks to improve the governance of the Bank of Jamaica (BOJ) and to introduce transparency to monetary policy decisions.

Dr. Clarke said it seeks to clarify the mandate of the central bank and give it autonomy and independence in law in the implementation of monetary policy.

It also seeks to have by law measures of accountability and to pivot that from the minister of finance to Parliament.

The Bill has been referred to a joint select committee of Parliament, comprising government members Dr. Clarke, Delroy Chuck, Floyd Green, Minister without Portfolio Fayval Williams, Leslie Campbell, and opposition members Peter Bunting, Wykeham McNeil and Mark Golding, who will examine it with members drawn from the Senate.

Under the standby agreement with the International Monetary Fund (IMF), the Jamaican government agreed to table legislation to revise the BOJ Act this month.

The reforms envisaged include clarifying BOJ’s primary objective to be price stability, strengthening the institutional independence and accountability, putting in place an effective board decision-making structure, and restoring policy solvency of the central bank.

To enhance the central bank’s governance framework, the government also agreed to improve the BOJ’s governance and independence in line with IMF recommendations. Those revisions will modernise arrangements for paying dividends, appointments to the BOJ board, and provisions of central bank financing to the government.