Chevon Campbell

The Bank of Jamaica, BOJ, remains confident in Jamaica’s underlying financial stability despite the continued COVID-19 induced economic downturn.

Central Bank Governor, Richard Byles, says the worst regarding the economic crisis should be behind the country even as it is not expected to return to pre COVID growth levels for years.

He was speaking at a quarterly briefing this afternoon.

Jamaica suffered one of its worst quarters in April to June with the economy contracting by more than 18 per cent.

According to STATIN unemployment also hit its worst point since 2017 in the same quarter at 13 per cent.

However, BOJ Governor, Richard Byles, says that should be the worst of the economic fallout Jamaica will have to face despite further contractions expected.

Mr. Byles remains optimistic that Jamaica’s economic stability is capable of keeping the country afloat.

He points to healthy balance sheets at deposit-taking institutions with loan quality well below the danger threshold.

Mr. Byles also retains confidence in the central governments’ current accounts deficit, which he says remains sustainable over the next two years.

As for foreign exchange, he says proper two way movement in the currency has been maintained with the Central Bank only stepping in during periods of volatility.

He also says despite an over 70 per cent fall off in tourism, foreign exchange reserves have kept pace with demand.

And, Mr. Byles says the Central Bank will likely keep the rate it offers to deposit taking institutions, DTIs, unchanged for the foreseeable future.

He says subject to stable inflation its monetary stance which sees DTI’s being offered only 0-point-50- per cent is unlikely to change until Jamaica returns to pre-COVID economic activity.

Mr. Byles says the Central Bank has provided 76 billion dollars in liquidity support to the financial system for the duration of the crisis.

This has been coupled with significant US dollar support for a combined and unprecedented 11 per cent of the country’s GDP.

However, Mr. Byles says this intervention has tapered off in recent months, with no expectation of similarly sized interventions in the future.

Meanwhile, Mr. Byles warns that inflation may go above the targeted 4 to 6 per cent in the short term due to adverse weather conditions and rising food prices.

But the Central Bank Governor describes this as a blip with the expectation of it returning within the expected range.

Richard Byles, Governor of the Bank of Jamaica.

He was speaking at a quarterly media briefing this afternoon.