JMD Strengthens 2% YTD Amid US Dollar Weakness and BOJ Support

  • Despite remaining largely stable through Q4 2025 following Hurricane Melissa in late October1, recent US dollar weakness has been a tailwind for the JMD so far this year. The JMD has appreciated 2.0% against the US dollar year-to-date, trading near JMD156/USD on February 3, 2026, down from JMD159/USD on December 31, 2025.
  • US officials have sought to reassure markets of their steadfast commitment to the “strong-dollar policy” following comments by President Trump suggesting otherwise – likely helping to stabilise the USD in the near term. However, Fitch BMI expects continued USD softness, which, when coupled with sustained BOJ support, all else equal, should support the JMD.
  • While weak growth, stronger import demand, and rising inflation will add depreciation pressure, sustained BOJ support should help to offset headwinds to the JMD. Despite BOJ’s interventions in the foreign exchange market since Hurricane Melissa in October 2025, Jamaica’s foreign reserve position has strengthened, by 12.5% in December 2025 y-o-y, from USD5.6bn to USD6.3bn, enough to cover 7.7 months of imports. This underpins Fitch BMI’s view that the BoJ will continue to support the currency as needed to offset imported inflation and maintain stability in the foreign exchange market.
  • Moreover, the BOJ is also expected to maintain a more restrictive monetary policy stance. The BOJ is expected to hold its policy rate at 5.75%in 2026while the US Fed delivers 50bps of cuts over the year, narrowing the interest-rate differential and supporting the JMD.
  • Consequently, Fitch BMI expects the Jamaican dollar to remain broadly stable through 2026, ending the year at JMD162/USD, from JMD159/USD to end 2025.
  • The BOJ's continued support of the currency amid USD softness will likely help manage the economy by curbing imported inflation and lowering the cost of rebuilding materials following Hurricane Melissa.

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1With the currency hovering just below the JMD160/USD level from November 2025 to December 2025 amid ongoing interventions by the central bank.

(Source: Fitch BMI & NCBCM Research)