Patrick Ellis, Chief Financial Officer at the JMMB Group
Chief Financial Officer at the JMMB Group, Patrick Ellis, says the Bank of Jamaica must reduce the benchmark interest rate from 5.75% per annum now in order to provide a stimulus to micro, small and medium sized as well as large enterprises, and by extension the economy.
Mr. Ellis, who was speaking in an interview on Power 106FM's Real Business on Thursday morning, said the US benchmark federal funds rate is now between 3.50% per annum and 3.75% per annum.
The higher local benchmark rate and the lower US benchmark rate provide very little incentive for investors to move US dollars from Jamaica to the USA and the prevailing political and social order of the US also exacerbates the situation.
Mr. Ellis also stressed that the BOJ currently has some US$6.7 billion in foreign reserves, which means that it can defend the currency at a competitive level of J$160 to the US$1.
The JMMB executive added that a lowering of interest rates would assist many of its clients who were affected by COVID-19, as well as hurricanes Beryl and Melissa.
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