The People’s National Party (PNP) has warned that the continued slide of the Jamaican dollar will have a devastating impact if not addressed.
In a release issued on Thursday (August 20) the Shadow Minister for Finance & Planning, Mark Golding, called for bold action and a different approach to the management of the foreign exchange market, to protect the Jamaican people during the economic crisis brought on by the global pandemic.
Last week, the Bank of Jamaica’s (BOJ) selling rate for the US Dollar surpassed $150 JMD and, despite repeated interventions by the bank into the market the Jamaican dollar has continued to slide.
According to the PNP, the devaluation is driving up the prices of goods and services, including transportation, electricity and basic food items, and is unleashing a wave of hardship on the population.
“Social dislocation and crime will become unbearable if we continue on the current road,” said Golding.
Golding slammed the Andrew Holness led administration for having said and done nothing to address the crisis.
According the PNP, the ruling Jamaica Labour Party (JLP) administration has continued with a market-based allocation and pricing mechanism at a time when inflows of foreign currency have been hit badly, especially from the tourism sector.
“A way must be found to navigate the society through the extreme economic conditions which have emerged,” said Golding in the release.
“Jamaica needs an emergency economic programme that supports expansion of the productive and export sectors, and ensures that these sectors are prioritised in the allocation of scarce foreign exchange. Agriculture, manufacturing, construction and global services must drive the economy forward, as tourism has collapsed with no sign of rebounding any time soon, ” added Golding.
Business and consumer confidence surveys have also showed that the uncertain and volatile exchange rate has contributed to the sharp slowdown in economic growth from 1.7% in the first quarter of 2019 to 0% in the fourth quarter, further falling into negative growth (-2.3%) in the first quarter of 2020.
The Jamaica dollar has depreciated by over 14% since the beginning of January 2020, and the country’s foreign reserves have fallen by over US$400 million since March this year.
As of August 19, the Jamaican dollar had dipped to a new low, with US dollar closing at $151.05 from $150.71 on the previous trading day.