THE EDITOR, Sir:Does it now make sense for us to consider dividing our present exchange rates by 100 to arrive at a realistic value of our dollar? A cent will then make sense! The French did this in the early 1960s when the exchange rate was about 970 francs to the English pound, and introduced the 'new franc'.
Further, we should find ways and means of stabilising our exchange rate (e.g., $5.50:US$1 for about three years in the mid-1980s when our economy started to grow steadily).
1. Our dollar is not internationally traded.
2. Practically all our forex income is stipulated in a forex currency, as follows:
a) Remittance from Jamaicans abroad.
b) Tourism income.
c) Bauxite/alumina income.
d) Practically all agricultural exports.
So devaluation does not, in my view, make us more competitive, which has been one of the main reasons given for devaluation and, I understand, promoted by the World Bank and International Monetary Fund.
3. Practically all of the negative impacts of devaluation fall on the poor. Remember that about 93 per cent of price increases stem from devaluation.
Please recall that the approach used by the Government in the 1980s to stabilise the exchange rate was essentially to identify the major players and manage the 'demand' quietly behind the scenes.