PSOJ wants BOJ to implement forex trading platform
The Private Sector Organisation (PSOJ) is urging the FX Working Committee established and led by the Bank of Jamaica (BOJ) to continue its efforts to implement the Electronic Trading Platform and to further develop the Forward Currency market.
The committee comprised bankers, cambio dealers and members of the business community
The platform is intended to facilitate inter-bank activity and foreign exchange transactions among traders.
It has been sold as a tool to reduce uncertainty in sourcing foreign exchange.
The platform will allow licensed forex traders to transact with each other.
Further, the PSOJ says the BOJ should continue to enhance its market intelligence gathering capabilities and proactive responsiveness to changing market conditions in order to reduce market imbalances which will undoubtedly occur in Jamaica’s small open economy.
The organisation notes that over the past month, the Jamaican dollar has traded with increased volatility and has lost ground to the United States dollar, trading with the weighted average selling rate closing at JA$141.89 at the end of trading on Thursday, November 7.
According to the PSOJ, for the calendar year to date, the point to point depreciation is 9.9% or J$14.17.
It outlines that while inflows to the market are at the same level as in October 2018, there has been an increase in seasonal demand from end user segment including clients from the energy, distributive, manufacturing sectors along with portfolio demand from financial institutions.
Additionally, it cites that the recent balance of payments data for the June 2019 quarter reflected a current account deficit of US$51.9 million which was driven by a significant increase of US$179.5 million in imports.
This deficit, it notes, necessitated a drawdown on the Net International Reserves of $67.9 million.
The PSOJ says it appreciates the anxiety the public will have due to the volatility of the currency, the loss in value of the Jamaican dollar and its impact on the business and individuals.
It is suggesting that the solution to Jamaica’s FX situation is to increase the country’s earning capacity through exports of goods and services and reduce its import bill through import substitution.