Over the last four months, the Jamaican-to-US dollar exchange rate has appreciated by approximately 4 per cent, and is now at approximately j$125 to US$1, indicating that a new exchange rate landscape might be on the horizon. The University of the West Indies (UWI) Department of Economics wants to unravel the implications for business and the economy in general in a forum at the UWI, Mona, Multifunctional room at the Main Library, next week Tuesday, February 13, 2018, commencing at 6:00 p.m. everyone is welcome to attend.
Speakers include Mr William Mahfood, chairman of the Wisynco Group Ltd, Dr Wayne Robinson, deputy governor of the Bank of Jamaica, and Dr Damien King, senior lecturer in the Department of Economics, UWI, Mona.
What is state of the currency now?
Coming from over J$130 to US$1 in May of 2017, the Jamaican dollar gradually appreciated to approximately $125.50 to US$1 at the end of December 2017 and has remained low since. Many Jamaicans are curious as to how this will affect their day-to-day lives, how it will affect their businesses, and how it will affect the economy in general.
What is the effect on businesses?
The Bank of Jamaica reduced the foreign currency surrender amount for businesses from 30 per cent to 25 per cent, which increased the foreign currency liquidity in the market by making more available for businesses to purchase. An appreciated currency makes imports cheaper; as a result, businesses that depend on foreign inputs into their production processes should be able to produce goods more cheaply, but will receive less for each quantity sold abroad when the revenues are converted into local currency. An appreciated currency should also translate into cheaper oil, gas, and fuel, which ought to be passed through to the consumer in some instances, but is not always the case as other factors like increasing oil prices, as well as monopolistic pricing in the energy sector, may put upward pressure on prices.