Foreign Currency Flows and the Jamaican Economy

Abstract

Chapter 1 analyzes Jamaica’s foreign currency flow with the rest of the world and puts the research into proper context. It explores the rationale for each exchange rate regime and their impact on the progression of the nation’s economy. Since gaining independence from Britain in 1962, Jamaica has employed five main types of exchange rate strategies. Each was designed to achieve specific objectives of the government, taking the local and global economic environment into account. Jamaica’s exchange rate regime moved from a currency board to a crawling peg to a dual exchange rate, then to an auction and allocation system and finally to a free-floating exchange rate system.