Jamaican Dollar Finally Begins Road to Stability

The Jamaican dollar (JMD) seems to have found stable ground after a period of depreciation.

On June 28, the Jamaican currency managed to reach a value of 149 JMD for every US dollar. The appreciation seems to have been ushered by a rise in remmitances from Jamaican nationals living in the US, an increase in income from touristic activity and lower oil prices.

Daily percentage change in the (J$/US$) exchange rate; 27 June 2023 #BOJspeaks pic.twitter.com/2O6HFu24Ni

— Bank of Jamaica (@CentralBankJA) June 28, 2023

A strong currency is critical for Jamaica. The island imports a considerable number of products from other nations, including gasoline, food grains, machinery and vehicles. A weaker currency makes these imports more expensive, fuelling inflation and lowering living standards.

Jamaica imported goods and services worth over US$5 billion in 2022, more than a quarter of the country’s GDP.

In the first two months of 2023, Jamaica’s central bank injected US$200 million into the foreign exchange market in a desperate bid to prop up the currency.

With inflation still hovering around 7%-8% and the economy expected to grow by only 1.1% in 2023, economics believe additional measures will be needed to stabilize the currency.

Jamaica raised interest rates from 2.5% to 7% in recent months as its inflation hit 8% earlier this year.