Bank of Jamaica says currency circulation increased by $23.6 billion or 21.4 per cent in December 2018, significantly higher than anticipated and the largest growth over the period in 11 years.
The central bank had projected a $18.1 billion increase or 16.5 per cent growth in the currency stock for December 2018.
"The faster currency growth possibly reflected improved GDP growth, employment and retroactive wage settlements during the period," the BOJ said, noting that, during the last six days of December 2018, it recorded $5.5 billion in net currency issue to financial institutions.
The increase for the month brought the currency stock to $133.5 billion at December 31, 2018, an annual increase of 20.4 per cent, which was more than the 12.9 per centannual growthrecorded last year.
"When the estimated change in consumer prices is taken into account, the real annual growth in currency at end-December 2018 was 15.9 per cent, compared to 7.3 per cent for the corresponding period in 2017," the central bank said.
The BOJ is anticipating that most of the currency issued during December 2018 will be redeemed during January 2019. It reasoned that for the last five years, net currency redemption in January averaged 75.8 per cent of the net currency issued in the preceding month.
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