November 6, 2017
The Private Sector Organisation of Jamaica (PSOJ) commends Governor Wynter, and the Bank of Jamaica (BOJ), on the introduction of the B-FXITT Foreign Exchange System, and more importantly the move to reduce the surrender amount of foreign currency by five percent, which is estimated to make another US$30 Million available to the market on a monthly basis.
The B-FXITT system has brought more transparency to the system, and is an improvement from the previous ad-hoc intervention that used to be the norm, as it allows greater predictability of foreign exchange flows, allowing for more precise planning on the part of businesses. Complemented by the reduced amounts required to be surrendered, this is a positive step that will allow for more stability in the foreign exchange market.
Greater stability will hopefully result in a policy focus on inflation targeting and we will not continue to be preoccupied with the foreign exchange rate, which is just a symptom of the underlying problem.
It is our hope that the BOJ, under Governor Wynter, will continue to further reduce the surrender requirements, as well as look at the reserve ratios to allow for more monies to be available to the market, which will reduce interest rates.
This move by the BOJ provides evidence that a rational and practical approach to regulatory environments can be positive, and it is our hope that the same approach can be applied to the restrictive regulatory environments with regard to pension funds and the insurance industry.
Paul Scott, PSOJ President noted that “…in order for the economy to expand, it is essential for domestic investments to be increased; investments need to be allowed to flow to productive assets if we are to increase our production and GDP.” He further stated that it is going to be essential for the government to evaluate the regulatory restrictions that we have for too long applied to capital thereby reducing its productivity. I am confident, in the move by the BOJ, which has shown that if we were to allow more capital to access the market, in a responsible manner, then we would see the expansion in economic growth that the country so desperately needs. I would like to congratulate Governor Wynter on the initiatives surrounding the FX market, and urge him to continue to take further steps in making the necessary changes to allow our countries assets to be put to more productive uses.”
Contact: Ms. Jodi-Ann Reid, Marketing and Public Relations Officer
Tel: 927-6238 (Ext. 2051); Fax 978-2709