Scotia sees J$130 to US$ in 2017

After losing nearly 30% of its value since 2012, the Jamaican dollar (JMD) is expected to maintain a defensive tone against the US dollar (USD).
The value of the JMD will continue to be affected by weaker sentiment towards emerging markets as the US Fed gradually tightens monetary conditions, as well as by investors’ perceptions regarding the implementation of the austerity program under the four-year Extended Fund Facility (EFF) loan agreement with the IMF, a recent report released by the economic units of Canadian Scotia bank stated recently.
“ We forecast a further depreciation in the JMD from a year-end rate of 120 in 2015 to around 125 this year and 130 in 2017 per USD. Net international reserves stood at US$2.26 billion in February, equivalent to over 5 months of import coverage” Scotiabank Economics Report stated recently.
Neither forecast would represent major moves in the value of the currency percentage wise. IC Insider.com data suggests that the currency may well remain around current levels for a prolonged period, or head to around 125 with inflation for 2016 looking like it will be less than for 2015, with no new major taxes expected. The tax break for persons earning less than $1.5 million could have a moderating impact on wage settlements and inflation as well.