By Chris Patterson
KINGSTON, Jamaica (JIS) -- Minister of finance and planning, Dr Peter Phillips, says Jamaica will continue to use a market determined exchange rate.
“The Bank of Jamaica remains prepared to intervene in this market in order to reduce and eliminate those who would want to speculate on the exchange rate or disrupt the stability of the market,” he said, adding that the country’s nominal exchange rate does not determine whether the currency is weak or strong.
Minister of Finance, Dr Peter Phillips makes his presentation as he opened the 2014/2015 Budget Debate on Thursday, April 17. JIS Photo
The finance minister’s statement is in response to suggestions that the country adopt a fixed rate of exchange to curb the depreciation in the dollar.
The minister made the remarks as he opened the 2014/15 Budget Debate in the House of Representatives on April 17.
He said the country must learn from the past, as rationing foreign currency and banning imports is ineffective.
“The only tried and proven way is to operate an exchange rate system where the market sets the rate – a flexible market-determined exchange rate… The adjustments that have been made to the Jamaican dollar will allow what we produce to be more competitive in the external markets and, at the same time, allow us to develop what we can produce in Jamaica,” he said.
He noted that having a competitive exchange rate is one of the keys to economic expansion and job creation.
Phillips said the exchange rate will stabilize once the country reduces its import bill, attracts more tourists, exports more goods, and stabilizes the economic environment.
The Jamaican dollar declined by 10.8 percent over the past year.