Exchange rate depreciation will not continue, says BOJ governor
Governor of the Bank of Jamaica Brian Wynter has declared that the rapid depreciation in the value of the Jamaican dollar over the past three weeks will not continue in that manner over the rest of the 2013-2014 fiscal year.
However, he noted that the exchange rate, which closed at J$104.85 to US$1 yesterday, was in line with the bank’s expectations.
Wynter said it was also factored into the BOJ’s inflation projections.
Speaking in an interview with The Gleaner, the BOJ governor explained that Jamaica was facing a balance of payments problem, and as a result, last fiscal year, the current-account deficit was 12.4 per cent of gross domestic product, or J$1.5 billion to US$2 billion.
He explained that to fill the gap, funds had to be borrowed from overseas or otherwise sourced.
He further explained that under the International Monetary Fund programme, which is focussed on reducing debt, the exchange rate has to be adjusted as part of the effort to improve competitiveness of Jamaican businesses.
Wynter emphasised that there is usually an increased demand for foreign exchange and somewhat less supply, at this time of the year.
Asked where the dollar is likely to settle, Wynter pointed out that it is important that the country has a market-determined exchange rate.
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