Kingston, Jamaica: The Bank of Jamaica (BOJ) is projecting an increase in the total currency of 13 per cent or $22-billion, which will be flowing in December 2020, in comparison to November.
The BOJ stated that the sum proposed at the end of December is $190.9 billion, which is supposed to be consistent with increased expenses linked with the Christmas season, versus $168.9 billion registered for November 2020.
Between December 1 and 11, a sum of $6.1 billion or 3 per cent of currency has been accounted in circulation, which is more than the $0.5 billion registered for the corresponding period in 2019.
According to the Central Bank, nominal 28.2 per cent increase can be seen in the December projection, compared to 11.5 per cent for the corresponding period of last year.
The BOJ also stated that the estimate is below the five-year average growth rate of 17.3 per cent for December.
As of December 11, a total $175 billion currency accounted in the hands of the public and the vaults of financial institutions.
As per BOJ “This high stock of currency may indicate the motives of deposit-taking institutions and individuals to keep precautionary cash balances amidst the ambiguities occasioned by the COVID-19 pandemic.”
Usually, BOJ issues and redeems notes and coins on daily order in hopes to meet the requirement for cash from people and businesses.
Stronger demand for currency can be observed during December, owing to the increased expenditure over the holiday period.
Financial institutions, therefore, request more currency from BOJ in order to satisfy this demand.