KINGSTON, Jamaica — The People’s National Party (PNP) today repeated its call on the Bank of Jamaica (BoJ) to give a clear explanation of its interventions in the foreign exchange market since April.

The PNP, in a release, argued that repeated platitudes about the normal interaction of supply and demand in setting the price of the United States dollar in a free market are not helpful, and do not explain why the BoJ was buying aggressively in a tight market and depreciating the currency by over six per cent in three months, at a time when Jamaica is substantially ahead of its reserves target.

The Opposition, through Shadow Minister of Finance, Mark Golding, questioned whether or not a main reason behind the currency slippage has been the BoJ’s inflation target of four per cent to six per cent for this fiscal year.

This target is not being met, as inflation for January through June was negative 0.3 per cent, the PNP said

According to the Opposition, it is being said that there was some discord between the BoJ and technocrats within the Ministry of Finance over setting such a high inflation target for this fiscal year, in which the BoJ prevailed. However, the basis for this inflation target has not been explained to the public, the PNP said.

The Opposition noted that the BoJ has just announced an intervention in the form of a BoJ indexed note, which is to be issued at 132.16.

While welcoming this effort to restore order to the turbulent market, the Opposition is reiterating its call for the BoJ to explain clearly to the public:

1. The reasons for BoJ’s actions in the foreign exchange market since April, which resulted in the Jamaican dollar weakening by over 6 per cent to a record low average selling rate of $135.44 to US$1 on Tuesday July 31;

2. Why the inflation target was set at 4 per cent- 6 per cent for this financial year? And,

3. Whether the Jamaican dollar has been deliberately depreciated by the market actions of the BoJ because of the failure to meet that inflation target?