Tuesday 22 October, 2019

PNP wants answers on US dollar shortage

Opposition spokesman on finance, Mark Golding.

Opposition spokesman on finance, Mark Golding.

The Opposition People’s National Party (PNP) is urging both the Minister of Finance and the Governor of the Bank of Jamaica (BOJ) to immediately address what it said is the “continuing severe shortage of supply of US dollars which has plagued the local foreign exchange market over the past three weeks…”

According to opposition spokesman on finance, Mark Golding, this shortage “has caused the ongoing rapid devaluation of the Jamaican dollar (against its United States counterpart).”

Golding also wants answers from the government for the sharp movement in the exchange rate in light of the fact that the country is in the midst of the winter tourist season when US dollars should be readily available.

“For this to be happening during the height of the winter tourist season is unusual and perplexing, and there has been no clear and definitive explanation from either the government or the BOJ as to what is causing this shortage of US dollars and the rapid devaluation,” said Golding in a statement issued Thursday.

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Golding noted that there were dealers in the market on Thursday were was selling at $138 to US$1.00 when just three weeks ago the rate was in the $127 range.

 “Businesses and consumers are anxious and need to know what is going on,” the opposition spokesman said.

He added that “businesses are unable to find the foreign exchange to pay their overseas suppliers, and this is adversely affecting their credit arrangements.”

And Golding warned that “at these exchange rate levels, prices of imported goods can be expected to adjust, to the detriment of consumers.”

He said this is happening again after the Bank of Jamaica recently announced that Jamaica had breached the lower end of the government’s inflation target for the second time this fiscal year. He argued that it is a repetition of what took place in June/July 2017.

 “In the absence of any explanation from the monetary authorities, I once again ask the question: “Are these repeated bouts of exchange rate volatility what Jamaica must expect as an unwelcome side effect of the BOJ adopting inflation targeting as its primary objective?” Golding asked.

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