Dollar Continues To Weaken

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Source: Bank of Jamaica

The history making Jamaican Dollar continues to break boundaries. diGgers did you know that when the J$100 to US$1 mark was broken on June 7, 2013, the JMD dollar only traded within that range for 5 trading days before selling for an average J$101.09 to US$1 on June 14, 2013.

After making it to the J$101 range, the Jamaican Dollar battled to retain its value against the United States currency, many of us wondered when and if it would pass the J$102 mark.

On August 21st 2013, after 46 trading days of flirting with the position the dollar traded for an average of J$102.03 to US$1 and further went on to end the month selling for an average of J$102.08 to US$1.

This represents an ~0.2% depreciation in the average selling rate from the end of July 2013, ~12% depreciation in the rate from August 2012 and ~9% since the start of the calendar year. Since the approval of the IMF’s Extended Fund Facility to Jamaica which was announced on May 1, 2013, when the average selling rate was $99.33 the currency has depreciated by ~3%.

In case you missed it, in a previous blog post “The Evaporating Dollar… we reminded you diGgers that staff of the International Monetary Fund believes our currency to be overvalued.

With the passing of the first IMF test and the scheduled disbursement of the second tranche of an estimated US$30M on September 20, 2013, let’s monitor the movement of the local currency during the month of September to see where the dollar will end up, will these factors result in some degree of appreciation or will the current depreciation trend withstand.

diGgers stay up to date with the monthly movement of the exchange rate and its impact on the conditions of the IMF program by checking out our IMF Special Report.  Fueled by research, it is the first and only online information portal about Jamaica’s relationship and interaction with the IMF, providing valuable newsdata, timelines and resources.