BoJ Maintains Presence in Foreign Exchange Market

The Bank of Jamaica (BoJ) will be maintaining a presence in the foreign exchange market until it settles.

            “This presence underscores the Government’s commitment to ensuring orderly conditions in the foreign exchange market within the context of a flexible exchange rate regime,” Minister of Finance and the Public Service, Hon. Audley Shaw, said as he closed the 2016/17 budget debate in the House of Representatives, on  May 25.

            There has been a noticeable increase in the pace of depreciation of the Jamaican Dollar since mid-April 2016, following an almost unchanged exchange rate during March and early April 2016.

            The Finance Minister explained that the faster pace of depreciation in recent weeks has been driven predominantly by large portfolio-related transactions and is not reflective of a deterioration in underlying economic fundamentals or confidence.

            “Let me stress that there is no shortage of foreign exchange in the country. The country’s international reserves have also remained healthy and continue to exceed benchmark levels,” Mr. Shaw said.

            The Bank of Jamaica (BoJ) has acted to address the accelerating depreciation that has been occurring over the past few weeks.

            Mr. Shaw informed that beginning on Friday, May 20, the Bank  intervened by selling substantial amounts into the market and this continued on May 24, with the effect that the pace of depreciation has now decelerated.