Arthur Hall, Senior Staff Reporter

Prime Minister Bruce Golding speaks at the Jamaica Labour Party's 65th annual conference at the National Arena yesterday. - Rudolph Brown/Chief Photographer

Prime Minister Bruce Golding has warned speculators that the Government will not stand by and allow them to cause a further depreciation in the Jamaican dollar.

Addressing delegates at the Jamaica Labour Party's 65th annual conference yesterday, Golding argued that the pressure on the Jamaican dollar was being driven, in part, by speculators.

While noting that several countries around the world have seen their currencies decline in recent weeks, Golding argued that speculators and persons hoarding the United States dollar were helping to drive down the value of the Jamaican currency.

Foreign exchange

"We have in the system enough foreign exchange to meet the normal demand and there is no reason for anybody to run down the dollar to drive down the dollar," Golding declared.

He said the Government would be getting any assistance it needed from the World Bank, the Inter-American Development Bank (IDB) and a friendly government to ensure that it can deal with any problems caused by the global economic fallout.

"We expect a US$120-million loan from the IDB to be in hand by February of next year. The World Bank has committed itself to lending us US$200 million. We are expecting that to be in hand well before the end of the financial year," Golding said.

"We are in discussions with two major commercial banks about providing liquidity support, just to ensure that we not only have enough foreign exchange; we have more than we need," the prime minister added.

He said the Government and the Bank of Jamaica were prepared to take any action necessary to protect the value of the dollar despite the cost.

"We are not going to allow speculators and hoarders to drive down the Jamaican dollar because when that happens, poor people suffer the most and, if we have to take strong, decisive measures, that will lead to some people complaining bitterly. Understand that we are going to protect the integrity of our foreign exchange market and our economic programme."

The Jamaican dollar has declined by seven per cent when compared to the US dollar since September despite intervention from the Bank of Jamaica.

arthur.hall@gleanerjm.com