The Bank of Jamaica (BOJ) profits continue to surge amassing $7.65 billion year-to-date.

The BOJ’s latest published balance sheet for last month shows that its profits increased by $300 million over the one-month period February to March 2021 . In February, the year-to-date profit was $7.35 billion.

Based on this trajectory, the BOJ seems set to record another year of profits in 2021. Profits earned by the BOJ goes to the Government of Jamaica (GOJ) as per section 9 of the BOJ Act, which states that profits earned by the bank is due to the GOJ, while losses incurred by the bank is funded by the GOJ.

This year’s national budget of $830.78 billion was funded by a large pool of funds from the BOJ, representing profits over the recent past, which are due to the GOJ. Earlier this month, the BOJ paid over the $33 billion as disclosed by Finance Minister Dr Nigel Clarke as dividend payments on its profits due to the GOJ.

This money is being used to help fund the GOJ’s $60-billion Social and Economic Recovery and Vaccine (SERV) Programme.

BOJ LATEST BALANCE SHEET

Based on the latest BOJ balance sheet, the central bank recorded a slight decline in total assets, which moved from $924.7 billion last February to $922.1 billion last month. One year ago in March 2020, the total asset was $697.3 billion.

Foreign assets suffered a marginal decline moving from $607.9 billion in February to $604.7 billion last month but was significantly up from the $494.4 billion recorded in March last year. Local assets were slightly up, totalling $317.3 billion last month compared to the previous month in February when the amount stood at $316.8 billion.

At the same time, total demand liabilities is going up registering $580.4 billion last month over the previous month in February when the figure stood at $566.7 billion. In March 2020, total demand liabilities stood at $490.2 billion.

There was a row between Finance Minister Dr Nigel Clarke and Opposition Leader Mark Golding over the $33-billion dividend payment. During the just concluded 2021/2022 budget debate in Parliament, the Opposition leader charged that $17.9 billion of the dividend came from foreign exchange trading and from net gains on the BOJ’s holdings of foreign currency assets.

He contended that “it is a regressive indirect form of taxation paid in particular by less-well-off Jamaicans,” arguing that, “this devaluation disproportionately hurts low-income people.”

Golding alleged that, “in using the $17.9 billion of foreign exchange gains from the Bank of Jamaica to fund its budget, the Government is essentially treating the devaluation as a form of tax.”

In his rebuttal, the finance minister declared that this is not the case, saying Golding was taking the Jamaican people for “fools”. Dr Clarke pointed out that central banks around the world make profits every year and Jamaican had been an exception.