If you spend enough time studying small economies, you learn something that never shows up in the glossy International Monetary Fund (IMF) reports: Size doesn’t determine resilience — discipline does. And Jamaica, for all its vulnerabilities, has been playing disciplined ball. Not every country with a thin export base, volatile tourism demand, and a heavy import appetite gets to steer its own currency narrative. Fewer still do it without theatrics, currency boards, or heavy-handed pegs.

Yet tucked away in the heart of Kingston, without media fanfare or parade-style policymaking, the Bank of Jamaica (BOJ) has been running one of the most underrated foreign exchange (FX) stabilisation tools in the region. No catchy acronym from a foreign consultant. No grand launch. Just a simple mechanism with a mouthful of a name: B-FXITT, short for the Bank of Jamaica Foreign Exchange Intervention and Trading Tool.

It doesn’t shout. It doesn’t make political speeches. But it has quietly changed the way Jamaica’s currency behaves. And in a world where the slightest whisper from the US Federal Reserve can jolt the dollar price on Half-Way-Tree Road, this tool is the closest thing Jamaica has to shock absorbers.

How B-FXITT Actually Works

Think of B-FXITT as a transparent auction floor where the BOJ steps into the market only when it needs to smooth volatility — not to play hero and not to manipulate outcomes. Before its launch in 2017, interventions were the stuff of rumour. Banks whispered. Merchants panicked. Ordinary Jamaicans were convinced the dollar had only one direction — down.

Today, the rules are clear and publicly enforced:

• Auctions are announced in advance.

• Dealers bid electronically during tight windows.

• Nobody can walk away with more than 20 per cent of the offer.

• The BOJ sells to both calm depreciation and buys to rebuild reserves.

And above all, the rules remain fixed regardless of who is the minister, governor, or party in power. In other words: Discipline and predictability replaced speculation and favour.

The precision matters. Jamaica imports most of what its households and industries consume, from flour to energy. One bout of FX chaos can turn into a price shock by the next grocery run. So, yes, B-FXITT is technical — but its impact is painfully real on supermarket shelves.

In the 12 months leading into October 2025, the BOJ sold over US$1.2 billion through B-FXITT, stepping into the market roughly 40 days a year. This November alone featured four flash auctions of US$30 million each, buffering the dollar near $160:US$1 heading into the holiday import surge. That steadiness didn’t happen by chance; it was engineered.

What Jamaica Has Gained

B-FXITT didn’t “fix” the exchange rate. It did something more valuable: It made the market believable. Here’s what has followed since its roll-out:

• The dollar now moves in two directions, not just down.

• Inflation sits near the BOJ’s 4-6 per cent target, averaging roughly 4.2 per cent through mid-2025.

• Gross domestic product (GDP) growth hovered around 2.1 per cent despite global shocks.

• The current account flipped into surplus — about 1.9 per cent of GDP, ending years of bleeding reserves.

• FDI remains stable, with a notable first-quarter bump this year.

• Confidence has translated into over 60,000 net new jobs since 2017, including 15,000 in the past year alone.

• But the biggest victory is psychological. Dealers now trade based on price, not panic. Bid-ask spreads have narrowed. Liquidity has deepened. And that old Jamaican instinct to hoard US dollars “because it only goes up”? It’s slowly losing its mythic status.

Even the IMF — never known for flattery — has been nodding in approval.

The Hidden Costs We Need to Admit

Stability isn’t cheap, and B-FXITT isn’t a free ride. The reserves that Jamaica uses to smooth turbulence aren’t infinite. By late October, net international reserves slipped to US$6.13 billion, partly because of repeated interventions. When the BOJ has to buy back dollars later at higher prices, small foreign-exchange losses creep in.

Then there’s sterilisation — soaking up excess liquidity with bonds paying 5-7 per cent. That tab easily runs US$50-60 million annually. It’s manageable, but it’s money that could be earning higher returns elsewhere. On top of that, frequent auctions risk making dealers a little too comfortable, waiting for the next BOJ lifeline instead of hustling to generate their own FX flows.

Still, these costs pale in comparison to the pre-2017 environment in which inflation galloped, the dollar slid without friction, and uncertainty choked investment. Price stability costs money. Instability costs far more.

The Real Opportunity We’re Missing

Here’s the uncomfortable truth: B-FXITT keeps Jamaica stable, but stability won’t make Jamaica rich. The country can’t intervene forever while:

• productivity creeps along at about 1 per cent a year;

• exports remain concentrated;

• and imports keep climbing because domestic production can’t replace them.

Meanwhile, the Dominican Republic grows at 4-5 per cent, not because it’s “luckier”, but because it has diversified and built industrial muscle.

To put it bluntly: Jamaica has mastered defence. It’s time to play offence.

Practical Upgrades for B-FXITT

We don’t need a revolution — just an evolution. Four realistic enhancements would take B-FXITT from stabiliser to accelerator:

1) Integrate real-time customs and trade data into FX forecasts to reduce surprise interventions.

2) Tighten dealer spreads further, ensuring regular businesses feel the benefit.

3) Reserve 10-15 per cent of each auction for smaller exporters who often lose out to big banks.

4) Install a quarterly circuit breaker — if interventions chew through more than 5 per cent of reserves, pause and reassess.

These adjustments protect stability without suffocating growth.

The Logical Next Step: A Jamaican FX Futures Market

If exporters could lock in exchange rates six to 18 months ahead, Jamaican goods would finally compete internationally without fear of sudden swings. That would:

• make banks more willing to lend;

• reduce borrowing costs for exporters;

• attract investment into manufacturing and logistics; and

• spur domestic production.

We could build it with a central clearing house, blockchain-secured contracts, and the BOJ playing referee — not dictator. Think of it as B-FXITT evolved into a full FX ecosystem in which Jamaica doesn’t just defend its currency, it leverages it.

From Shock Absorber to Growth Engine

B-FXITT has done more than steady the Jamaican dollar. It has modernised market behaviour, rebuilt trust, and restored the discipline a country like ours needs to withstand external storms. But it’s time to stop patting ourselves on the back for stability and build the next phase of economic ambition.

We don’t need a new hero. We need to scale the one we’ve already built and turn stability into strategy.

Jamaica has stunned the world before. Not by being big, but by being precise. Usain Bolt wasn’t the tallest sprinter. Reggae didn’t come from the richest studios. Our power has always come from defying expectations.

With the right evolution, B-FXITT could do for the economy what our culture did for the world: Make a small island impossible to ignore.

Janiel McEwan is an economic consultant. Send comments to the Jamaica Observer or janielmcewan17@gmail.com.

Janiel McEwan

The US dollar now moves in two directions — not just down.