There’s been a dramatic slowdown in the rate of depreciation of the Jamaican dollar, with the local dollar losing only 1 cent over the past two months!
That’s the word from Co-Chair of the Economic Programme Oversight Committee, EPOC, Richard Byles.
Mr. Byles’ comments come just over two months since the government successfully raised 800-million US dollars on the international capital markets at historically low rates.
It also follows the intervention of the Central Bank in the foreign exchange market shortly after the bond issue in July.
Mr. Byles says there’s been a return of confidence to the foreign exchange market.
Between January 2 and July 10, when the Bank of Jamaica intervened in the foreign exchange market, the Jamaican dollar moved from 106 dollars and 39 cents to one US dollar, to 112 dollars 71 cents each.
This represents a loss in value of 6 dollars and 32 cents or 6 percent.
Some institutions were reportedly selling the US dollar for as high as 118 Jamaican dollars in early July.
But, Mr. Byles, who was speaking yesterday with Nationwide News, says since that time, depreciation has slowed substantially, with the local dollar losing only 1 cent since July 10.
Mr. Byles says the current exchange rate is based on economic fundamentals and has improved the prospects of local exporters.
Senior Deputy Governor at the Bank of Jamaica, John Robinson, agrees with Mr. Byles.
Mr. Robinson says there’s also been less demand for foreign exchange as a store of value, or as an alternative asset.