The Private Sector Organisation of Jamaica (PSOJ) is urging the foreign exchange working committee to continue efforts to implement the electronic trading platform and further develop the forward currency market.
The working committee established and led by the bank of Jamaica comprises bankers, cambio dealers and members of the business community.
The call by the private sector comes amidst concerns over the volatility in the trading of the Jamaican dollar which has lost ground to its US counterpart.
The weighted average selling rate closed at $141. 89 yesterday.
The PSOJ notes that for the calendar year to date the point to point depreciation was 9.9% or $14.17.
The business leaders add that the solution to the foreign exchange problem is to increase the country’s earning capacity through exports of goods and services and reduce the import bill through import substitution.
They say most importantly the BOJ should continue to enhance its market intelligence gathering capabilities, and proactive responsiveness to changing market conditions, in order to reduce market imbalances which will undoubtedly occur in Jamaica’s small open economy.
A PSOJ statement says while inflows to the market are at the same level as in October 2018, there has been an increase in seasonal demand from end user segment including clients from the energy, distributive and manufacturing sectors along with portfolio demand from financial institutions.
It adds that the recent balance of payments data for the June 2019 quarter reflected a current account deficit of US $51.9 m which was driven by a significant increase of US $ 179.5 m in imports noting that this deficit necessitated a draw-down on the net international reserves of $67.9 m.
The PSOJ states that it appreciates the anxiety that the Jamaican public will have due to the volatility of the currency and the loss in value of the Jamaican dollar and its impact on the business and individuals.
The group notes that under the economic reform programme Jamaica has adopted a flexible exchange rate regime which has seen the Jamaican currency moving in both directions.
It highlights the initiatives by the BOJ to bring transparency and price discovery to the market among them, the introduction of B-Fxitt.
The group says the measures should reduce volatility in the market overtime through increased visibility of transactions in the market and over time an efficient forward market to hedge positions and reduce the foreign exchange risks of the private sector entities and individuals.