GEISHA KOW­LESSAR-ALON­ZO

Se­nior Re­porter

geisha.kow­lessar@guardian.co.tt

Lo­cal busi­ness­es seek­ing to get US dol­lars from the Ja­maican bank­ing sys­tem us­ing the T&T dol­lar may no longer be able to do so. So said econ­o­mist Dr Vaalmik­ki Ar­joon as he re­spond­ed to the de­ci­sion by the Bank of Ja­maica (BoJ) to tem­porar­i­ly sus­pend the ac­cep­tance of TT cur­ren­cy from to­mor­row.

“It will put a se­ri­ous dent for those T&T eco­nom­ic agents who try to ac­cess US dol­lars from the Ja­maican bank­ing sys­tem us­ing the TT dol­lar, sim­i­lar to what has oc­curred in Guyana.

“In­deed, sev­er­al busi­ness en­ti­ties have made at­tempts to sup­ple­ment the short­fall they face when ac­cess­ing USD from lo­cal banks by at­tempt­ing to source them, not on­ly through the black mar­ket, but al­so from oth­er banks in the re­gion in­clud­ing in Ja­maica.

“This move by the BoJ will, how­ev­er, stymie such a prac­tice in Ja­maica, but can there­after help to com­pound black mar­ket sales of US dol­lar,” Ar­joon ex­plained. He al­so not­ed the move showed wan­ing con­fi­dence in the TT dol­lar in Ja­maica.

On Fri­day, Ja­maica’s cen­tral bank, which is called the Bank of Ja­maica, said it was sus­pend­ing the ex­change of T&T ban­knotes at its counter ef­fec­tive to­mor­row “un­til fur­ther ad­vised”.

In an in­ter­im no­tice, the BOJ ad­vised the pub­lic “that the ex­ist­ing arrange­ment for BOJ to repa­tri­ate T&T ban­knotes is cur­rent­ly un­der re­view”.

In this re­gard, ef­fec­tive to­mor­row, the ex­change of TT dol­lars at BOJ’s bank­ing counter is sus­pend­ed, the BoJ added.

Ar­joon al­so not­ed that some in Ja­maica who send monies to, for in­stance, fam­i­lies in T&T may al­so opt to send it in US dol­lars es­pe­cial­ly giv­en the in­ac­ces­si­bil­i­ty of US cur­ren­cy lo­cal­ly. He al­so not­ed that de­mand for a coun­try’s cur­ren­cy is al­so a re­flec­tion of the con­fi­dence in the cur­ren­cy’s econ­o­my.

“If there is in­signif­i­cant de­mand for the TT dol­lar by Ja­maica, it sug­gests wan­ing con­fi­dence by cer­tain Ja­maican eco­nom­ic agents in the T&T econ­o­my.

“This could be re­flect­ed in, for in­stance, a low­er in­ci­dence of Ja­maican vis­i­tors to T&T. Those who do vis­it, whether it be for busi­ness or en­ter­tain­ment etc, may opt to use their cred­it cards or ac­cess cash di­rect­ly here through the ATMs when spend­ing,” Ar­joon not­ed.

“It’s pos­si­ble that the rea­son for the sus­pen­sion of TT dol­lar pur­chas­es by the Bank of Ja­maica was that sales of TT dol­lars by the com­mer­cial banks in Ja­maica are not sig­nif­i­cant and pos­si­bly very mar­gin­al, ow­ing to low de­mand for the TT dol­lars,” he ex­plained.

Ar­joon fur­ther said that the cost of buy­ing and hold­ing the TT dol­lar for the Bank of Ja­maica and com­mer­cial banks in Ja­maica would be much greater than any re­turns made from sell­ing the TT dol­lar.

The econ­o­mist not­ed the de­mand for TT dol­lars in Ja­maica might not be healthy, stem­ming from the fact that eco­nom­ic en­ti­ties in Ja­maica have lim­it­ed need for the cur­ren­cy.

While not­ing that trade be­tween the two coun­tries is con­duct­ed in US dol­lars, Ar­joon said even if the BoJ stopped buy­ing TT dol­lars, it would like­ly not af­fect ex­ports from this coun­try to Ja­maica be­cause these trans­ac­tions would typ­i­cal­ly be car­ried out in US cur­ren­cy.