Monday 19 November, 2018

Holness laments 'growing pains' as dollar devalues

Andrew Holness

Andrew Holness

Prime Minister Andrew Holness on Wednesday blamed past devaluation of the Jamaican dollar on “poor fundamentals of the economy”, which he said was not the reason behind the current decline of the local currency.

Holness, who was addressing journalists at his quarterly media briefing, acknowledged a 12 per cent depreciation of the local currency against its US counterpart between February and August 8. During that time, the dollar moved from $121.70 to one US dollar to $136.44 to one US dollar. It has since gone past the $137 to one mark.

However, the Prime Minister argued that while the Jamaican dollar lost 41 per cent of its value under the previous People’s National Party Government, moving from $86.61 to $121.79 between January 2012 and February 2016, that happened “against the backdrop of very poor fundamentals of the economy.

“But if you were to look in this dispensation, the economy is actually very strong,” Holness argued.

He described the current depreciation of the Jamaican dollar which has left many  people anxious as “growing pains.”

“I can well understand it because from a psychological perspective…the country has long valued its progress, valued itself in US dollars and when there is a devaluation, the response is always one of fear, sometimes panic,” he said.

“It is quite understandable, but I think it behoves me to say to the nation that we are in a new era. We are in a new economic dispensation and the transition to that economic dispensation will have these kinds of what I will describe as growing pains,” Holness added.