Dear Editor,
The Jamaica Manufacturers’ Association (JMA) is concerned about the ongoing devaluation of the Jamaican dollar and the adverse effects that could ensue if clear and decisive measures are not taken to stymie the impact.
It remains disconcerting that, to date, the Jamaican dollar has seen a decline of 5.6 per cent since the start of the year, trading at an average rate of $127.25 to US$1. The impact of a currency’s gyrations on an economy is far-reaching for both consumers and businesses.
While it has long been posited that real depreciation will stimulate exports, a move yet to be manifested in the Jamaican context, what is clear is that it affects import-dependent industries and consumers in the short term. One such sector is manufacturing, as many of the raw materials utilised in the productive processes are sourced from overseas. This results in locally produced commodities being more costly, and ultimately reducing their competitiveness.
While businesses will take measures to reduce the risk posed from fluctuations, such measures will only temporarily mitigate the adverse effects of fluctuations and will prove ineffective in the long term.
Depreciation will also have an adverse impact on the purchasing power of our consumers, leaving households with less disposable income and also affecting our oil import bill, and subsequently electricity rates.
If allowed to continue unimpeded, it may fuel speculation, resulting in a loss of business and consumer confidence that does nothing to inspire investment. What is evident is that there must be a discontinuance of “business as usual”.
The JMA is urgently advising the Government to reopen the dialogue on the exchange rate regime most suitable for effective currency management at this juncture, and review the current methodology to suit the goals of our macroeconomic policy and the economic objectives we want to achieve.
We are fully signed on to the fact that we must not only grow our domestic economy, but we must also increase our exports substantially.
As business people, what we need is a stable dollar and predictability to expand, compete, and create jobs to ultimately grow the economy.
Jamaica Manufacturers’ Association Ltd
Kingston
djamila@jma.com.jm
The Jamaica Manufacturers’ Association (JMA) is concerned about the ongoing devaluation of the Jamaican dollar and the adverse effects that could ensue if clear and decisive measures are not taken to stymie the impact.
It remains disconcerting that, to date, the Jamaican dollar has seen a decline of 5.6 per cent since the start of the year, trading at an average rate of $127.25 to US$1. The impact of a currency’s gyrations on an economy is far-reaching for both consumers and businesses.
While it has long been posited that real depreciation will stimulate exports, a move yet to be manifested in the Jamaican context, what is clear is that it affects import-dependent industries and consumers in the short term. One such sector is manufacturing, as many of the raw materials utilised in the productive processes are sourced from overseas. This results in locally produced commodities being more costly, and ultimately reducing their competitiveness.
While businesses will take measures to reduce the risk posed from fluctuations, such measures will only temporarily mitigate the adverse effects of fluctuations and will prove ineffective in the long term.
Depreciation will also have an adverse impact on the purchasing power of our consumers, leaving households with less disposable income and also affecting our oil import bill, and subsequently electricity rates.
If allowed to continue unimpeded, it may fuel speculation, resulting in a loss of business and consumer confidence that does nothing to inspire investment. What is evident is that there must be a discontinuance of “business as usual”.
The JMA is urgently advising the Government to reopen the dialogue on the exchange rate regime most suitable for effective currency management at this juncture, and review the current methodology to suit the goals of our macroeconomic policy and the economic objectives we want to achieve.
We are fully signed on to the fact that we must not only grow our domestic economy, but we must also increase our exports substantially.
As business people, what we need is a stable dollar and predictability to expand, compete, and create jobs to ultimately grow the economy.
Jamaica Manufacturers’ Association Ltd
Kingston
djamila@jma.com.jm