Stop worrying about the dollar - Audley Shaw
Finance Minister, Audley Shaw, has called for a halt to what he has described as speculation and panic, which he contended to be serving to unnecessarily drive up the local exchange rate.
Speaking at a Development Bank of Jamaica (DBJ) event at the Jamaica Pegasus hotel in Kingston on Tuesday, Shaw declared that there is no shortage of foreign currency in the financial system, only a need for the foreign currency market to “settle down”.
He said the Government and the Bank of Jamaica (BOJ) are putting an orderly process in place to ensure that information flows seamlessly throughout the foreign exchange market.
The minister, in seeking to establish that the exchanged rate has pretty much settled down, cited a movement of 1.8 per cent in the exchange rate over the last year, in comparison to seven and eight per cent movements in previous years.
“It’s (been) a very sharp deceleration, and we need to settle down, everyone in the foreign exchange market needs to settle down, because right now we have record foreign exchange reserves,” asserted Shaw.
“The figures that I saw yesterday (of) US$3.8 billion in gross reserves, almost US$4 billion in gross reserves, it is the highest level of gross reserves that we have ever had,” he elaborated.
He said as a consequence, “there is no need for there to be any extraordinary rush for foreign exchange, and driving down and depreciating our dollar.”
The minister said he was calling “on every Jamaican, every businessperson and every bank to “stop it! stop it’ settle down, and let’s keep our exchange rate stable, because the people who suffer the most from destabilisation of the exchange rate are our hardworking people of Jamaica, our poor people, and if we want to build a competitive economy and move from poverty to prosperity, we need to keep our exchange rate stable.”
Shaw made the remarks at the launch of the DBJ's "Promoting Financial Inclusion in Jamaica" project.
He pointed to the DBJ’s product launch as another round of impetus for the micro and small business sectors.
“… I want to say to you and (the) Exim Bank, get ready, because we are coming with more products, because we are going to find more avenues and more opportunities.
“We want to say to the micro credit sector, start heading in a direction of lower interest rates, because when you are lending money to people at 30, 40, 50 per cent, they can’t do anything productive with that; certain types of buy and sell can’t work with that.
“So we want to develop a culture where we begin to head into lower interest rates, and the differential between those that would be through the micro credit and even the credit card system, can’t be a differential of between (at) one end seven per cent, and the other end (at) 50 per cent or 40 per cent.”
He said the country needs to get out of “those kinds of interest rates” in order for more opportunities and growth to be generated in the economy.