Business

'FX black market will thrive until IMF deal delay'

BY HORACE HINES Observer staff reporter

Wednesday, January 02, 2013    

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THE black market will thrive under further delays in an International Monetary Fund (IMF) agreement, according to Davon Crump.

Business interests will likely scramble for foreign currency, according to the president of the Montego Bay Chamber of Commerce and Industry (MBCCI).

"We expect that the current uncertainty will cause the black market to thrive as persons scramble to get foreign currency before further slippage in a last-ditch attempt to save their businesses and business transactions," Crump told the Jamaica Observer.

He claims that there are already reports of business operators now buying the US dollar at the rate of $95.

The official rate has already slipped to $93 to one US dollar, which is blamed by some financial analyst on the panic caused by the uncertainty of when Jamaica will secure an IMF deal.

Meanwhile, Crump warned that other negatives will likely stem from a delay in signing of an IMF agreement.

Those include: major price increases of all imported products; the inability for businesses to implement measures that will be in keeping with the economic trends for 2013; delay in potential foreign investment; and impediment of growth, particularly in the export sector.

He challenged Government to invite the business sector to participate in talks with the multilateral agency.

"We therefore implore the Government to immediately, and in the future, engage more of the business and commercial sector, including heads of governmental and civil society in the dialogue," he said. "We can only appreciate the ramifications of hammering out a deal when we are a part of it."

Recently, harsh criticisms have been levelled at Finance Minister Peter Phillips by political analysts and members of the Opposition Jamaica Labour Party (JLP) for failure to ink a new pact with the IMF by the end of 2012.

But Phillips fired back, heaping some of the blame for the delay on the collapse of previous talks with the JLP Government.

That experience, according to Phillips, had resulted in the IMF insisting that, as many as possible, measures be implemented ahead of a deal being signed.

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