Gov’t out of options to stop JA$ devaluation

[evanovitch]

Friday, 06 February 2009
At least one financial observer believes the Government has run out of options to halt the rapid slide in the value of the Jamaican dollar.

Despite the Government raising interest rates and hiking the cash reserve requirement of financial institutions, the Jamaican dollar continues to lose value against its US counterpart.

Financial Analyst, David Wan, said the Bruce Golding administration is now facing a dead end as far as defending the dollar is concerned.

"The options are fairly limited, it's the interest rate tool they can use or in the past they have used index bonds which without getting into the full details tends to coax people out of their US dollar holding. But I haven't seen that in the very recent past,"

"The interest rate tool is the one that is used to mop us liquidity but hurts the productive sector so there is no easy answer. So I would say those are the two options available and right now the added problem is the international situation," said Mr. Wan.

And foreign currency trading will resume on Friday morning with the <span style="font-weight: bold">US currency being sold for an average $87.72.</span>It is costing <span style="font-weight: bold">$70.93 for the Canadian dollar and $127.24 for the pound sterling.</span>

[evanovitch]

Gov’t chided for silence on weakening dollar


Friday, 06 February 2009

As more alarm bells go off over the massive slide in the value of the Jamaican dollar, the Government is being chided for its silence on the matter.

Financial Analyst, David Wan, said it appears that the administration is quietly watching as the currency quickly loses its value.

&quot;What struck me is that the authorities have remained fairly quiet on this topic and it is moving everyday. The only statement that I have heard recently was from Minister [Don] Wehby who said we have a lot of foreign exchange coming in soon and the dollar may even revalue, that is the quote I heard,&quot;

&quot;But it is very strange to me that we have not had a pronouncement because either they are allowing it to devalue and they are comfortable with it because of the inflation deferential we have had with the US or they are not able to control it,&quot; said Mr. Wan.

The local currency has declined by more than 10% against its American counterpart in the last two months.

<span style="font-weight: bold">During trading Thursday authorised dealers were selling the US dollar for a high as $88.80.</span>

[RichD]

Re: Gov’t chided for silence on weakening dollar

maybe the want it to slide a bit more

[evanovitch]

Re: Gov’t chided for silence on weakening dollar

porque?

[RichD]

Re: Gov’t chided for silence on weakening dollar

slow down importation make the jamaica tourism prduct more attractive...make the jamaica wage structure more competitive

[evanovitch]

Re: Gov’t chided for silence on weakening dollar

how u gwine feed di touriss dem if u stop import..memba u import all weh u use in di industry?

[RichD]

Re: Gov’t chided for silence on weakening dollar

those aren't the imports they might be hoping to curb

[sagal]

Re: Gov’t chided for silence on weakening dollar

US currency being sold for an average $87.72.It is costing $70.93 for the Canadian dollar and $127.24 for the pound sterling.


People are not enraged about this

[RichD]

Re: Gov’t chided for silence on weakening dollar

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: sagal</div><div class="ubbcode-body">US currency being sold for an average $87.72.It is costing $70.93 for the Canadian dollar and $127.24 for the pound sterling.


People are not enraged about this </div></div> thats about the same amount the canadian dollar has slipped in the past few months

[evanovitch]

Re: Gov’t chided for silence on weakening dollar

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: RichD</div><div class="ubbcode-body">those aren't the imports they might be hoping to curb </div></div>

well given dat nutten is produced on the island wat dem hope to cut out...dem could not even agree dat di PM not wanting to spend farrin exchange pon a cyar ...style before reality

[jah_yout]

Re: Gov’t chided for silence on weakening dollar

at least it nuh reach zimbawe level...a million to one

[evanovitch]

Re: Gov’t chided for silence on weakening dollar

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: jah yout</div><div class="ubbcode-body">at least it nuh reach zimbawe level...a million to one </div></div>

dont dem abandon dem currency all togedda ovah deh?

[RichD]

Re: Gov’t chided for silence on weakening dollar

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: jah yout</div><div class="ubbcode-body">at least it nuh reach zimbawe level...a million to one </div></div> dem woudl be happy wid million to one ..is more like 100 billion to one

[evanovitch]

Jamaica must use global slowdown to transform economy

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: RichD</div><div class="ubbcode-body">maybe the want it to slide a bit more </div></div>

<span style="font-weight: bold">Jamaica must use global slowdown to transform economy, says financial services head</span>
Published on Friday, February 6, 2009

KINGSTON, Jamaica (JIS): Executive Director of the Financial Services Commission (FSC), Rohan Barnett, has said that <span style="font-weight: bold">Jamaica must use the period of the global economic slowdown to work to transform the economy and position the country on a path towards sustained growth</span>.

Barnett, who was representing Finance and Public Service Minister, Audley Shaw, at Guardian Life Insurance Limited's 'Stars Luncheon' in Kingston on Tuesday, said that &quot;this is not a time to roll over and play dead. It's not a time to talk our people into despair, and our economy into deeper depression&quot;.

&quot;Obviously, we have to be in a position where we're prepared for the rebound in the market. To be prepared and ready, we must create a wholesome economic space, we must correct the inherent weaknesses that have handicapped us for too long,&quot; he pointed out.

Stating that economic growth was the &quot;only real solution&quot; to the country's problems, the FSC head said that Government is pursuing reform policies, which are tailored towards increasing fiscal responsibilities, and reducing debt and achieving sustained growth.

He noted further that the social partnership for transformation, involving the Government, the opposition, the private sector, the trade unions and civil society, is set to gather momentum, as stakeholders become more cognisant of the urgent need to establish a stable and safe economic and social environment.

&quot;This, we believe, will form the sure foundation for rapid investment, economic growth, job creation, social equity, and justice,&quot; he argued.

Stressing that the prevailing challenges &quot;can't go on forever&quot; and &quot;those of us who prepare today, will prosper tomorrow,&quot; Barnett said that now is an opportune time for entities to implement programmes such as worker skills training, technology upgrading, and research and development.

&quot;More companies must now expose themselves to programmes such as the Private Sector Development Programme (PSDO), and the Quality Jamaica Project, which includes training in Hazard Analysis Critical Control Point (HACCP), as well as the modernisation of industry programme. We must sharpen our focus on increasing productivity in order to achieve international competitiveness, niche investment opportunities, in addition to our traditional exports and markets, in which we have established a strong presence,&quot; he underscored.

Citing sectors, which present the potential for growth, Barnett said that the manufacturing sector is diverse and modern, with furniture manufacturing, in particular, presenting a very lucrative option, given the growth of tourism and other industries that have direct linkages to this area.

He also pointed to opportunities in agro-processing, food processing, beverages, and tobacco, pointing out that the food processing sector grew by 3.3 per cent in 2007, while growth in the beverages and tobacco sectors stood at 1.8 per cent.

&quot;Continued growth in these sub-categories is expected due to the anticipated increase in food production. That drives the notion that we can, indeed, produce more food to feed ourselves, feed the region, and increase our market share. This is the time for that,&quot; the FSC head stated, while also citing bio-technology as another area of opportunity.

[X]

Re: Gov’t out of options to stop JA$ devaluation

the wider picture.
Is the issue the J$ devaluing, OR the U$ revaluing globally?

If the J$ was simply devaluing against its major tading partners, then the CDN$ should be somewhere nearer to J$84 to CDN$1. Instead its at $70 to 1.
Bear in mind that approximately 8 months ago the rate was in the ballpark of J$70-U$1, and J$67-CDN$1, so while the U$ shot up bu J$17, the $CDN gained only J$3.
The US$ has seen some revaluation globally since November last year, suh not sure if there much the Jamaican govt can do realistically about the exchange rate right now.