Inflation, FX stability

Outgoing Bank of Jamaica Governor, Brian Wynter cites as his best achievements

BY RICHARD BROWNE
Observer Business Editor

Sunday, July 21, 2019

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“There is an economic change that is happening in Jamaica that is enormous,” according to Brian Wynter, the outgoing governor of the Bank of Jamaica (BOJ) .

Wynter was speaking during a farewell luncheon with specially invited journalists at the central bank's auditorium on Wednesday last (July 17).

The governor, who is finishing two five-year terms, will shortly be demitting office for incoming Governor Richard Byles, took the opportunity to assess what were his main accomplishments during his 10 years in charge of the nation's central bank.

At the top of the list was inflation, which was running at about 20 per cent when he started his tenure in November 2009.

“In March 2010 the rate was over 13 per cent, and that declined last year to about four per cent,” Wynter noted.

The BOJ governor stated that, “this has brought about a weird situation where the bank now has to try to explain 'too low' inflation, where the bank has missed its inflation target on the down side, and has seen a rate of below five per cent over the last three years.”

He continued: “In fact, Jamaica's inflation is now low by historical standards and is even lower than the rate experienced in the booming 1950s and 1960s. I'm really proud that I've been able to lead the BOJ through this change.”

The second significant change was that of the exchange rate.

In the fiscal year before he took office, the Jamaican dollar had depreciated by 24.9 per cent. By fiscal year 2018/2019, the rate of depreciation was 0.4 per cent and the year before, the Jamaican dollar appreciated by more than two per cent. Year-over-year, the dollar had depreciated by 4.1 per cent as of Tuesday.

“This is what we call stability.

“That's the achievement, I want to point out and as you look ahead it's reasonable to expect the future to look like the past.”

“We've got the exchange rate stability, we wanted,” the BOJ Governor stated.

According to Wynter, the last time there was a significant depreciation was 2013/14, when the dollar depreciated by approximately 10.8 per cent but since then the rate has been three, four and five per cent.

“The exchange rate has been brought under control but somehow the public isn't feeling it because of short-term fluctuations.”

Noting the two achievements, Wynter said that the Bank of Jamaica had a first-rate staff.

“They are outstanding but the flip side of the positive economic change that is happening in Jamaica could represent a challenge for the bank

“Just as things are getting better for Jamaica the challenge will be how do you build a quality staff in an environment like that,” Wynter offered to those present at the luncheon, with the implication being that staff and future potential employees may be attracted by salaries and opportunities in the private sector.

Wynter then revealed that he has not started to consider his own future once he becomes unemployed. While some people have assumed he may be heading for retirement, it has also been suggested that he might be heading for a job at the International Monetary Fund (IMF).

A vacancy there currently exists with the resignation of Managing Director Christine Lagarde, but recent international reports did not mention Wynter as a potential replacement for the post which traditionally goes to a European national. The reports instead were looking to Bank of England, Governor Mark Carney or former British Finance Minister George Osbourne.

In 2016, the newspaper of the International Monetary Fund (IMF)/World Bank Annual Meeting, Global Markets, named Wynter as Central Bank Governor of the Year for the Caribbean.

The glossy newspaper dubbed him then as the “quietly spoken inflation killer”.


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