December 24, 2020

In 2020, the foreign exchange market experienced two-way movements in the exchange rate. The Jamaican economy has seen a rapid depreciation in the exchange rate this year amid the pandemic due to our economy’s dependence on tourism. The central bank has implemented numerous initiatives with the objective of providing liquidity to and ensuring the continued smooth functioning of the foreign exchange market. BOJ conducted B-FXITT intervention sales, directly sold FX to major players in the energy sector, reduced the foreign currency cash reserve requirement, introduced FX swap arrangements, and provided a US dollar bond 4 repurchase facility. According to Richard Byles, Governor of The Bank of Jamaica (BOJ), “between March and October, daily purchases of foreign currency by authorised dealers and cambios from end users averaged US$30.4 million, slightly lower than the average of US$33.4 million recorded last year. Shortfalls in the market have been met by BOJ B-FXITT sales of US$242.3 million since the onset of the crisis in March 2020.”

Based on a survey conducted, the anticipated exchange rate at the end of the following quarters in 2021 are:

Q1 2021: $147

Q2 2021: $148

Q3 2021: $149

Q4 2021: $152

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