Finance Minister Dr Nigel Clarke has said that should the central bank use the country’s reserves to stem the unpredictable movement of the exchange rate, Jamaica’s external sustainability would be compromised.
He said Jamaica has achieved external sustainability, where the country is now in a position today to pay and service its external obligations as they become due.
“There is some who would want the reserves to be used to ensure that the exchange rate doesn’t move, [but] that would be a misuse of your reserves and that would be inimical to your interest,” Clarke said.
He was speaking on Saturday at the third staging of the annual Mayor’s Charity Ball, hosted by Montego Bay Mayor Homer Davis at the S Hotel Jamaica Convention and Events Place, Montego Bay, St James.
“And the fastest way to lose external sustainability is to misuse the reserves in your central bank,” Clarke told the gathering of business leaders, security experts and politicians.
“As business people without external sustainability, your ability to conduct business as you know it today would be compromised,” he said.
Business leaders in Montego Bay urged the Bank of Jamaica (BOJ) to intervene by using a portion of the national reserve to stem the continuous devaluation of the local currency against the US dollar, which traded on November 1 at J$140.42 to US$1, the highest it has traded for so far this year.
“A more moderate exchange-rate system is best for all our businesses’ predictability and will only be balanced by the BOJ’s decision to intervene with the use of the reserve and/or the use of other macro-monetary measures,” Janet Silvera, president of the Montego Bay Chamber of commerce, said then.
Meanwhile, Clarke said Jamaica is widely known worldwide for its economic status, which was evident when the Jamaican flag was recently flown over the New York Stock Exchange building in the United States, saluting the performance of the country’s stock market.
“But ladies and gentlemen, Jamaica is being known around the world today for its economy and that is a very powerful thing. We have been embarking on the policies and procedures to ensure that continue for a long time,’ he added