Trinidad busi­nesses buy­ing forex in Ja­maica – JMA

Jamaica Gleaner - - FINANCIAL GLEANER - STEVEN JACK­SON Se­nior Busi­ness Reporter

TRINIDAD BUSI­NESSES are buy­ing US dol­lars in Ja­maica and cre­at­ing ad­di­tional de­mand for the cur­rency, ac­cord­ing to the pres­i­dent of the Ja­maica Man­u­fac­tur­ers’ As­so­ci­a­tion (JMA).

Metry Seaga said the pur­chases are hap­pen­ing at an alarm­ing rate, at a fo­rum he mod­er­ated be­tween JMA mem­bers and the Gov­er­nor of the Bank of Ja­maica, Brian Wyn­ter, at the JMA head­quar­ters on Wed­nes­day.

“It seems to me that we are hav­ing an is­sue now, where Trinidad com­pa­nies in Ja­maica and even those who are not, are hav­ing an is­sue where they can­not get US dol­lars to buy in Trinidad be­cause of the fixed rate or nearly fixed rate there, and the gov­ern­ment has dried up all the US dol­lars avail­able,” said Seaga.

“What we have found hap­pens and we have first hand in­stances through­out our mem­ber­ship is that those com­pa­nies are hav­ing their Ja­maican af­fil­i­ates buy dol­lars in Ja­maica, cre­at­ing a de­mand for it that doesn’t exist in Ja­maica. And it is hap­pen­ing at an alarm­ing rate,” the JMA pres­i­dent added.

In Trinidad, amid com­plaints of a short­age of for­eign cur­rency by busi­nesses, the cen­tral bank is­sued a warn­ing ear­lier this year that black­mar­ket trans­ac­tions are an of­fence and pun­ish­able by fines or the pos­si­bil­ity of jail terms rang­ing up to five years.

Seaga’s as­ser­tion at the fo­rum sug­gests that Trinidad busi­nesses are look­ing be­yond their own mar­ket to their hap­pen­ing, he would not be wor­ried by it, say­ing Ja­maica re­mains open for busi­ness.

“I think this is a good thing,” re­sponded Wyn­ter. “I am not sit­ting here say­ing I want you to do it or whether you should do it. I am say­ing that you are free to do it,” Wyn­ter com­mented.

“We have the where­withal to man­age it. Ja­maica has reached a po­si­tion of strength,” he said.

Wyn­ter said Ja­maica is able to han­dle in­creased pres­sure on the for­eign ex­change mar­ket, as the Ja­maican Gov­ern­ment has re­duced its fis­cal im­bal­ances.

“It is a com­plete trans­for­ma­tion,” he de­clared, “I can­not overem­pha­sise it – it is just that it is not glam­orous or easy to see.”

“But speak­ing from the work that I do, it is the best kind of change that you could want – to mak­ing this coun­try more sta­ble and ca­pa­ble to re­spond,” Wyn­ter said.

The fo­rum was con­vened to ad­dress con­cerns of man­u­fac­tur­ers re­gard­ing the pace of de­cline of the Ja­maican dol­lar and im­pli­ca­tions for the cost of do­ing busi­ness.

As of Wed­nes­day, the JMD had de­pre­ci­ated 7.19 per cent year to date.

Wyn­ter said at his quar­terly press brief­ing on mon­e­tary pol­icy on Mon­day that the lo­cal cur­rency was fairly valued.

Metry Seaga, pres­i­dent of the JMA. neigh­bours to ac­quire US dol­lars.

But Wyn­ter told Seaga he was un­aware that Trinidad

Brian Wyn­ter, gov­er­nor of the Bank of Ja­maica. com­pa­nies were us­ing the lo­cal econ­omy in such a way. Still, the cen­tral bank chief also sig­nalled that if it were

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