Fri | Dec 3, 2021

Letter of the Day | Fixing the unpredictable, unstable Ja dollar

Published:Saturday | April 20, 2019 | 12:00 AM


For years I listen to the financial experts on our local airwaves with their message concerning the movements and unpredictability of our Jamaican dollar, relative to the mighty US dollar, and it would appear over the years we have only managed to lock ourselves into a sort of grin-and-bear-it predicament.

It is well known if the same plan is being repeated continuously, it will not be surprising to find the same results are achieved, therefore the instability will continue.

It is time for an imaginative approach to be taken in an attempt to find a creative solution to fix our unstable dollar, and finally put this problem to bed.

I’m no economist, just one who believes in simplicity first in focusing on solutions.

My solution to at least remove the unpredictability factor is quite simple.

Great is Edward Seaga, who seems to have had a historic finger on the solution. My respect to an outstanding creative thinker.

My solution is simply to have the authorities decide on a fixed rate of exchange, say, for example, J$125 to US$1, and decide to use the fixed rate for either three or six months. At the end of the time frame, evaluate the situation and modify appropriately:

a). Continue rates unchanged.

b). Revise rates appropriately upwards.

c). Revise rates appropriately downwards.

What we are left with is a managed exchange rate and some breathing space to indulge in a little forward planning which is necessary for growth, and naturally, we would also welcome the return of predictability back on to the landscape of production.