Letters to the Editor

The sliding dollar

Wednesday, September 05, 2018

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Dear Editor,

The Jamaican dollar took a trip to the water park and has been having a wail of a time on the slides going down and down, making a big splash in a pool of trouble for Jamaicans.

The Government and the governor of the Bank of Jamaica (BOJ) have been trying to calm fears of an impending panic that the dollar slide may cause. The Jamaica dollar has been steadily losing ground against the American dollar, moving from $123.875 - US$1 on the 1st April 2018 to rapidly closing in on $138 - US$1 as at August month end.

The devaluation of the Jamaican currency will have far-reaching effects on goods and services and such effect will definitely affect both up and downtown. Hence it is not okay for the Government to just say it will be okay. The average person may not be a financial guru but will understand if one pays more for a thing then they will have less to spend on something else.

The devaluation will also affect the Net International Reserve (NIR) which, in a nutshell, is the amount of emergency money that the BOJ reserves sufficient to pay for at least 8 - 12 weeks of imports of goods and services for the country in case of a disaster.

Ironically, state minister for finance and the public service, the Hon Fayval Williams made the disclosure during her contribution to the 2017/18 Sectoral Debate in the House of Representatives, saying that the NIR is at the highest its ever been since 2002 — but this is no comfort to a sliding dollar.

The dollar has lost $14 in four months and whilst this may not sound like much, in the perspective of the devaluation of a country's currency the economics would tell you it would take 9 and 10 figures to undo. While panic will not help the devaluation situation, there is enough cause for the average man to be concerned.

Maxine Hylton


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