Exchange Rate Continues to Show Flexible Two-Way Movements

Governor of the Bank of Jamaica, Brian Wynter, says the exchange rate has continued to exhibit flexible two-way movements.

Speaking at the quarterly monetary policy report press conference, held at the Bank’s downtown Kingston offices on November 19, the Governor said that at the time of the Bank’s last press conference, the exchange rate was on an upswing, and this stirred considerable concern among business people and the wider public.

“Since then, the exchange rate has strengthened, largely due to reduced end-user demand combined with increased supplies from the market. The Bank assesses that the market is more than adequately supplied with US dollars and has recently presented an opportunity for it to buy foreign exchange from the market,” Mr. Wynter pointed out.

He noted that the Bank announced its intention to buy US$10 million on December 5, 2018, via multiple-price competitive auction, in accordance with the B-FXITT rules.

“Purchases by the Bank are used to meet the foreign exchange requirements of the Government and public-sector bodies, such as for debt service, and to build reserves. The Bank also purchases in circumstances where this is necessary, in order to maintain orderly conditions in the foreign exchange market,” Mr. Wynter explained.

Meanwhile, he reiterated that Jamaica’s macroeconomic indicators are positive, with inflation low and on target, and international reserves are at healthy levels.

“The current account of the balance of payments, while projected to widen, should remain at sustainable levels. Market interest rates are at record lows and fiscal performance is strong,” Mr. Wynter said.

He added that in this favourable economic environment, and while the outlook for inflation remains within the inflation target, the Bank of Jamaica is able to maintain an accommodative monetary policy stance, in support of expanded output and job creation.