Jamaica News: Finance and the Public Service Minister, Dr. the Hon. Nigel Clarke, says Jamaica could be in a position to borrow from the international capital market in local currency within five years.
He said that the country is already on this trajectory, citing the Government’s move towards attaining operational independence for the Bank of Jamaica (BOJ), supported by a credible inflation-targeting framework and flexible exchange rate.
“If we do this successfully, within five years Jamaica will be able to issue its first Jamaican dollar bond in the international capital market,” Dr. Clarke said.
He was speaking at a Foreign Exchange Market Development Forum at the BOJ Auditorium in downtown Kingston on Wednesday (July 24).
Dr. Clarke said that the advantages/benefits of countries borrowing in domestic currency internationally are significant reduction in the impact of risks on their economies; and enhanced prosperity over prolonged periods, citing Germany and Japan as examples.
“We wouldn’t be depending on our local institutions for lending to us in Jamaican dollars [as] we could borrow Jamaican [currency] overseas.
“That would allow us to, over time, change the composition of our debt, which [would] leave us less susceptible to exogenous forces that can affect an economy,” the Minister pointed out.
He noted that a number of overseas investors owning “billions of dollars” of Jamaican bonds, with whom he spoke during recent investor road shows in North America and Europe, were “very impressed” with the country’s economic progress over the past six years, and “look forward to the day when they can lend to us in our own currency”.
“So, the strategic intent and long-term strategy is to be able to diversify sources of funding and to have the domestic institutional credibility that we can borrow in our own currency internationally,” he added.
The symposium formed part of the joint sensitisation thrust by the Ministry and BOJ, to heighten public awareness about developments in the foreign exchange market.
Source: JIS News
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