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Cabinet has given its approval for the reduction of interest rates that are payable on judgement debts.
Minister of Information and Development, Senator Colin Campbell, who made the disclosure at the weekly post-Cabinet press briefing at Jamaica House, yesterday (May 8), explained that the reduction in the rates of interest was based on recommendations that came from the Central Bank for both local and foreign currency judgements.
“The interest rate applicable to foreign currency has always been substantially less than the applicable rate to Jamaican currency because of the perception involved in the exchange rate movement,” Minister Campbell told reporters, adding that the overall weighted rate applicable to foreign currency was presently in the region of 4.96 per cent.
He emphasised that a consistent approach would therefore, justify a substantial reduction in the cost of interest rates on foreign currency judgements.
Rates of interest which are payable in respect of judgements are governed by statute. According to the Minister, by way of a decision in September 1998, the necessary orders and supportive resolutions were made to give effect to an increase from 6 to 12 per cent.
He noted, however, that currently there were two issues of concern, one being “the present rate that was fixed in a high interest regime, which no longer obtains”.
The other issue that was identified, he added, was the rate of 12 per cent, which was applicable to all judgements, whether in local or foreign currency.