BOJ Actions Have Stabilised Foreign Exchange Rate And Market

• The Bank of Jamaica (BOJ) has reported that the foreign exchange rate and the market have remained relatively stable over the last two years, reflecting, in part, the actions taken by the institution.
• During the Central Bank’s recent quarterly monetary policy media briefing, Governor Richard Byles revealed that the BOJ, through its Bank of Jamaica Foreign Exchange Intervention Trading Tool (B-FXITT) facility, sold approximately US$585Mn in 2023. However, in contrast, the bank net purchased about US$761Mn over the same period.
• As of August 16, Jamaica’s gross international reserves remained substantial at approximately US$4.6Bn, which exceeded the standard measure of adequacy by approximately 15%, and the Bank projects that the reserves will remain adequate over the medium term.
• As it relates to inflation expectations, the BOJ’s latest survey showed less than 14% of the respondents indicated that a strong depreciation in the exchange rate was the most important factor behind their views of future inflation. Meanwhile, Mr. Byles said Jamaica’s economy continues to expand, which supports increases in aggregate demand for goods and services and can potentially drive inflation upwards.
• The Planning Institute of Jamaica (PIOJ) has estimated that the economy grew by 1.5% for the June 2023 quarter and that there are signs of continued expansion for the September 2023 quarter. Data from the Statistical Institute of Jamaica (STATIN) indicate that the country’s unemployment rate in April 2023 was 4.5%, the lowest on record.
• The Bank continues to project growth ranging between 1% and 3% for fiscal year 2023/24, largely due to expansion in the mining sector and continued growth in tourism and its allied industries. Over the medium term, the economy is projected to settle at its long-run growth rate of 1%-2%.

(Source: JIS News)