Jamaican businesses and citizens are being encouraged to find more legal ways to earn US dollars to help offset the volatility in the foreign exchange market.

Over the past few weeks the Jamaica dollar has been under heavy pressure against its US counterpart falling to new record lows, above the JMD155.00 to USD1.00 threshold.

Speaking on Taking Stock with Kalilah Reynolds, Assistant Manager of Private Equity at PROVEN Management, Julian Morrison said while the volatility of the dollar has not been as bad as previous years from a historical perspective, the depreciating trend remains of concern to all stakeholders.

Assistant Manager, Private Equity at PROVEN Management, Julian Morrison

“When you look at our purchasing power and the fact that wage growth in Jamaica is flat or negative, it’s not good especially as most Jamaicans have to rely on their wages for survival,” Morrison reasoned.

He reiterated that Jamaica’s energy and food import bills are two main factors influencing the foreign exchange rate, noting that the situation stands to get worse if the country’s current account deficit widens. The current account deficit refers to the ratio of Jamaica’s export earnings to its import spending.

“For every dollar we earn in exports we spend $4.00 on imports and that’s a huge gap,” said Morrison.

While the tourism sector has been helping to control the fluctuations in the rate, the COVID-19 pandemic continues to hinder the sector from rebounding to pre pandemic levels.

As part of the solution to alleviating some of the pressure, Morrison said both companies and citizens should now be focused on finding new ways to entice foreigners to buy goods and services in Jamaica in order to earn more USD.

 “That will help to abate some of the pressures on the foreign exchange rate,” said Morrison.

Morrison said technological advancements are now creating opportunities to earn USD right from the comfort of homes and has called on more persons to explore the emerging occupations.

While releasing Jamaica’s latest labour force survey for April 2021, the Statistical Institute of Jamaica confirmed that social media influencers, including youtubers, were among the list of new jobs being accounted for in the labour force as the pandemic continues to erode traditional work.

The individuals were marked as employed as they were carrying out the activities for pay during the reference week of the survey STATIN said.

“It’s up to us as citizens to be entrepreneurial and to find legitimate means, we know there are challenges, barriers around export and high barriers to entry in some markets but it’s not impossible. With technology, people can earn USD from their youtube channels; they’re ways to do it,” said Morrison. 

Meanwhile Wealth Advisor at Ideal Portfolio Services, Dwayne Taylor has called on Jamaicans to take up the opportunity to sell products on Amazon and Ebay, alternatives to earning in USD. The online marketplaces recently approved Jamaica on their sellers lists.

“People need to capitalize on that. It might be one of those measures that can help us mitigate all of this in terms of earning more USD in Jamaica,” he said while noting that the sliding dollar should be especially concerning for local businesses that have to purchase products on the international market.

Taylor said at this time there’s not much that can be done to reverse the situation which also presents challenges for companies seeking to make investments outside of the country.

Wealth Advisor at Ideal Portfolio Services, Dwayne Taylor

“It’s hard to approach the situation because let’s say we approach the market by buying up some USD and maintaining some foreign currency holdings, that’s still going to drive up the JMD further and we don’t want our local players to have an even more difficult time participating in the international market with the dollar continuing to depreciate,” he said. 

Since the start of the year the dollar has been consistently trading over JM$140.00 to US$1.00. It had etched past the $155 threshold mid July. The Bank of Jamaica (BOJ) has not yet made any indication of an intervention.

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