Devaluation painful but necessary, says IMF chiefSaturday, June 28, 2014
KINGSTON, Jamaica -- Christine Lagarde, managing director of the International Monetary Fund (IMF) described the local currency depreciation as painful but necessary to achieve competitiveness and restore dignity.
“It is painful but it has restored lost competitiveness,” she told a packed lecture hall at the University of West Indies, Mona on Friday.
“You cannot bleed your reserves in order to support your currency that is overvalued. The currency has to have the right value and the Jamaica dollar was overvalued,” Lagarde insisted.
“It is a credit of this government, the finance minister and Governor of Central Bank to have taken the bull by the horns because it’s hard as it impacts on consumers in the short term,” she said of the depreciation of the local currency.
Lagarde delivered a 40 minute speech which outlined the present and the historic challenges of Jamaica and the Caribbean.
“The IMF has changed, yet we do not always enjoy a stellar reputation in some countries. Most of that is unfair as we are the scapegoat,” she said explaining that governments come to the IMF as a last resort and the subsequent harsh reforms are executed by the government rather than IMF.
Lagarde, an invited guest of the government, spent three days in the island.
Now you can read the Jamaica Observer ePaper anytime, anywhere. The Jamaica Observer ePaper is available to you at home or at work, and is the same edition as the printed copy available at https://bit.ly/epaper-login