JMA Online News
JMA squeals!Says dollar devaluation and high interest rates killing the productive sector
Written by: Jamaica Observer
Date: 2009-02-06
With the Jamaican dollar now close to J$88 to US$1 and the country's economy inexorably sliding into deeper turbulence, the Jamaica Manufacturers Association (JMA) felt compelled to call on the Government to address the calamitous situation in an effort to avert further damage to the productive sector. Below reads its prepared statement:
The Jamaica Manufacturers' Association is appalled at the Government's failure to implement effective measures to stabilise the Jamaican dollar. The free fall of the dollar has shattered an already fragile business confidence.
The Bank of Jamaica and the Ministry of Finance needs to act urgently and decisively to stabilise the dollar to regain business confidence and prevent the total destruction of the productive sector. Additionally, the measure by the Bank of Jamaica (BOJ) to stabilise the dollar by increasing interest rates is ineffective, and has only served to compound the problem by further contracting the economy.
The continued devaluation of the dollar has caused difficulties in sourcing United States (US) dollars in the market, and therefore paying foreign suppliers. Consumers are also being impacted negatively because of escalating prices, and as a result, consumer purchasing is down and so too are the sales of locally manufactured goods.
The efforts of the BOJ should not be to defend the dollar by hiking interest rates, which has been ineffective in curtailing the escalation of the dollar and is damaging to the productive sector. The BOJ must comply with its statutory objectives which include: "To influence the volume and conditions of supply of credit so as to promote the fullest expansion in production, trade and employment."
We call on the government for immediate and effective action to restore confidence levels in the local currency and provide some hope for the productive sector.
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