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Holness describes depreciation of J'can dollar as 'growing pains'

Wednesday, August 15, 2018

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KINGSTON, Jamaica — Prime Minister Andrew Holness this morning described the depreciation of the Jamaican dollar as “growing pains”, indicating that a review of previous instances points to “very poor fundamentals of the economy”.

“I can well understand it because from a psychological perspective….the country has long valued its progress, valued itself in US dollars and when there is a devaluation the response is always one of fear, sometimes panic.

“It is quite understandable, but I think it behoves me to say to the nation that we are in a new era. We are in a new economic dispensation and the transition to that economic dispensation will have these kinds of what I will describe as growing pains.”

The Jamaican dollar over the past few weeks has seen a significant decline in value against the United States (US) currency, trading at $136.44 to one US dollar on August 8, in comparison to $121.70 to one US dollar in February.

“That's a 12 per cent depreciation,” said Holness, who was speaking at the Prime Minister's Quarterly Press Briefing today.

“Compare that to the movement under the previous administration from 2012 to February 2016, the Jamaican dollar was at $86.61 on January 1, 2012, and by February 25, 2016, the Jamaican dollar was at $121.79. That's a depreciation of 41 per cent.”

Holness said a review of previous instances of the depreciation of the local currency “you would see that they have come against the backdrop of very poor fundamentals of the economy. But if you were to look in this dispensation, the economy is actually very strong”.

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