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PSOJ backs BOJ foreign exchange policy directive

Published:Wednesday | February 22, 2017 | 2:53 PM
Chief Executive Officer of the Private Sector Organisation of Jamaica, Dennis Chung.

The Chief Executive Officer of the Private Sector Organisation of Jamaica (PSOJ) Dennis Chung is backing the new policy directive of the Bank of Jamaica seeking to discourage the saving of US hard currency.

At the same time, Chung speaking with The Gleaner Power 106 News Centre today called for the policy to be monitored.

The BOJ announced earlier this week that it is implementing a three percentage point adjustment in cash reserves and liquid assets that deposit-taking institutions are required to hold against foreign currency liabilities.

 

Chief Executive Officer of the Private Sector Organisation of Jamaica, Dennis Chung.

Chung in welcoming the policy noted that the PSOJ has been long advocating for adjustments to be made to the foreign exchange ratios as a part of broader measures to bring back confidence to the Jamaican dollar.

 

Dennis Chung notes PSOJ advocacy

The CEO of the PSOJ argued that the move by the central bank could force holders of US dollars to reinvest in the local economy as the Jamaican dollar strengthens.

 

Dennis Chung

During the last three months of 2016, the BOJ gradually increased the cash reserves and liquid assets requirements for foreign currency liabilities in the banking system to bring them in line with the reserve requirements for Jamaican dollar liabilities.

At December 2016, the cash and liquid assets reserve requirements stood at 12 per cent and 26 per cent, respectively, for both foreign currency and Jamaican dollar liabilities.