Jamaican Central Bank predicts significant increase in demand for local currency

The Bank of Jamaica (BOJ) says total demand for local currency is expected to increase by J$18.1 billion leading to an estimated J$128.1 billion in circulation for the month of December.

The BOJ said the anticipated increase, which coincides with Christmas festivities, is broadly consistent with the 16.5 per cent growth recorded for December 2017, as well as the five-year average growth rate of 17.3 per cent for the month.

Additionally, it represents an accelerated annual growth rate of 15.5 per cent, when compared to12.9 per cent for December 2017.

“When the forecasted change in the general level of consumer prices is taken into account, the projected real growth in currency for 2018 is 10.5 per cent, which is higher than the real growth of 7.3 per cent for the previous year,” the BOJ said.

It noted that projected acceleration in the growth in real currency demand for December 2018 is consistent with the higher growth rate that has been evident between August and November 2018, “possibly associated with a strengthening in real GDP (gross domestic product) growth and employment over the second half of the year”.

The BOJ, the island’s central bank, said it issued that a  total of J$4.2 billion between December 1 and 14, representing a 3.8 per cent growth for the month to date, as against a net issue of $J1.4 billion over the same period in 2017.

As at December 14, 2017, the stock of currency in the hands of the public and in the vaults of financial institutions amounted to J$114.1 billion.