Stability Has Returned to Foreign Exchange Market – BoJ

The Bank of Jamaica (BoJ) is reporting that stability has returned to the foreign exchange market, enhanced by a lowering of the demand for net foreign currency to facilitate current account transactions.
BoJ Governor, Hon. Derick Latibeaudiere, speaking at the quarterly press briefing at the Bank’s downtown Kingston location this morning (Aug. 12), said that the reduction in the demand for net foreign currency was associated with a decline in foreign exchange outflows, resulting from lower expenditure on consumer goods and fuel imports.
He pointed out also that stability was achieved in the market despite the fallout in remittances and tourism.The Governor again defended the Bank’s intervention in the foreign exchange market to moderate the demand for foreign exchange and help bring down interest rates.
He pointed out that on July 24 and 30 the Bank had again reduced interest rates by 100 basis points, and 150 basis points respectively, across its spectrum of open market operations instruments.
These actions, he said, were based on the continued stability in the foreign exchange market, the reduction in annual inflation, and in inflationary expectations.
“The bank will continue to monitor the developments in the market and adjust policy to ensure continued stability in the financial markets. We believe these actions, together with the Government’s announced intention to enter into a borrowing arrangement with the International Monetary Fund (IMF), have boosted investor confidence,” Mr. Latibeaudiere stated.