Jamaica Dollar To Return To Depreciatory Course In 2019

• Fitch forecasts that the Jamaican dollar will depreciate over the coming months, as inflation picks up and the current account deficit widens. Over the long term, they expect the pace of depreciation to slow relative to the past decade as more orthodox economic and monetary policies support the currency. 

• Additionally, Fitch expects real interest rates in Jamaica will remain well below those in the US over the coming quarters, placing downside pressure on the Jamaican Dollar. 

• While they expect the Bank of Jamaica to increase its benchmark policy rate by 75 basis points (bps) in 2019, they anticipate that it will maintain a relatively accommodative policy stance. Meanwhile the expectation is that the US Federal Reserve will raise interest rates in the US by an additional 75bps points in 2019 after raising rates by 75bps in 2018.

(Source: Fitch)