According to a survey undertaken by Bank of Jamaica in September, senior officers in the business sector anticipate an upturn in the pace of depreciation of the Jamaican dollar for the 3-month, 6-month and 12-month periods beyond the survey date.
This was relative to the August 2013 survey, which showed a lower expected pace of depreciation over all the time horizons. In the September 2013 survey, the exchange rate was expected to depreciate by 1.8 percent, 3.0 percent and 4.7 per cent for the 3-month, 6-month and 12- month horizons, respectively.
By comparison, the August survey had expected depreciation of 1.5 per cent, 2.6 percent and 4.3 percent over the respective horizons.
If the expectations of the interviewees were to materialise, then the exchange rate would be around J$110 to the US dollar but then that is not quite consistent in the September 2013 survey where the respondents’ expectation of inflation 12-months ahead increased to 10.4 percent in the September 2013 survey, relative to 10.3 per cent in the August 2013 survey. This inflation expectation would suggest an exchange rate adjustment closer to 7 or 8 percent.
The Statistical Institute of Jamaica (STATIN) undertakes surveys of businesses on behalf of the Bank of Jamaica to ascertain the expectations about variables which are likely to have an impact on inflation in the near-term. In this regard, the survey captures the perception of Chief Executive Officers, Managing Directors and Financial Controllers about the future movement of prices, current and future business conditions and the expected rate of increase in wages/salaries.
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