The Jamaica Manufacturers and Exporters Association, JMEA, today lashed out at banks and financial institutions for what they’re calling “extortionist” markups in the sale of US dollars.
According to the JMEA, the markups are the highest in the CARICOM Region.
They’re also again blasting the banks for what they say are some of the highest interest rate spreads in the world.
The JMEA is pointing to the Bank of Jamaica’s trading summary, which shows how much banks on average pay for US dollars, and how much they sell it for.
On August 16, banks and cambios bought US dollars for as high as $138.50, and then sold those dollars for as much as $146.25. That’s a 5.6 percent markup.
JMEA Deputy President, Richard Pandohie, says they’ve done extensive research, and found that this is one of the highest markups in all of CARICOM.
The JMEA says commercial banks, especially, seem to be more interested in boasting a double-digit increase in revenues and net profits but demonstrate blatant disregard for the development needs of the country.
The association is calling on them to reduce their markups to make Jamaica more competitive globally.
According to Pandohie, the situation is even worse when it comes to interest rates.
The JMEA says between 2006 and 2016, Jamaica’s interest rate spread was nearly double the world average.
The spread refers to the difference between the interest rates banks pay to its depositors, and the rates at which they subsequently lend that money to borrowers.
According to data from the JMEA, the spread has been as high as 15-percent, representing huge profits for the banks.
Pandohie says they’re very upset about it.
The JMEA says is questioning if the BOJ’s monetary policy of lowering interest rates and setting a 5% inflation target is to drive production, then why are the banks taking so long to respond and play their role in economic growth and development for all?