My Views: A Pegged Exchange Rate?
My view on economics
Ok, The Former Prime Minister During an honorary joint meeting of the house of parliament in his honor suggested that Jamaica should peg our currency to a more prominent one of which would boast a plethora of advantages. Of course that currency would have to be the US Dollar (
Which I always shorten here in and always as USD), an idea and push made many years by the former prime minister which I have no issues over.
The Benefits in my view far out way the bad in this case as a continual rise of the dollar among others pushes as a prominent point towards the advancement of this idea of which I believe action should be taken NOW!.
So what are some of the dis-advances which I have learned push this action in the blocs?:
- A bit of Economic reliance:An obvious dependence on the economic benefits of another market which would create reliance. A beneficial reliance if one might say so for those like me but a bad reliance of your one for full economic independence which I believe Jamaica can never have do to our size added with our Actions Every day.
- A rise in interest rates? Bear with my learning in this area but won’t this happen if our rates continue to rise on their own as the currency is already rising to an all-time high of $90.51 and might reach that record $100 mark if Mr. Seaga’s wonderful suggestion is not taken into full account.
- The IMF and Our Other Bank Loans: a clear matter which is being addressed at a slow rate but who am I to judge…. Sorry I meant I am to judge(being a citizen of this country) and say this economic action would be of benefit to IMF this would give the advantage of meeting their checklist for an arrangement as well as the islands already High Debtswhich may be cut in half or even 70-80 percent, if my economic absorption is right.
- There will not be Enough printed money to supply the demand: OK, again my absorption of economic principles might not be great but what the heck would cause such a thing? Isn’t this going to mean that we would be able to afford the printing? Can we currently afford the printing we do annually? Am I to think that we are only looking to pay our Bank Loan (IMF And Creditors) as a country by pegging our grocery list with that of our neighbor which is in effect virtually what we would be doing?
- Remittances Contribute to GDP/GNP:it is a fact that the Diaspora contributes highly to the economic good of the country and the disadvantage said to be is that we would loose this profit from Remittance contributions if I am right(I am sure) which would be a theoretical loss of economic growth on part. Wherever this theory is dug, I fair to shay to the idea that remittances would increase inflow or a possibility of flocks of Members of the diaspora coming back to the island to live.
The Overall Benefits:
- Added Economic Advantages, which The Bahamas has with a Pegged exchange rate which makes it easy to attract the USD Tourist market as Tourist would not have to lose much of the currency value to trade against the Bahamian Dollar which is virtual a USD.
- Financial Value: The Government already has a firm belief that the economy cannot prosper without our investors. The Commitment is further boosted by the promise to remove the bureaucratic barriers that currently exist in addition to the plans to have Kingston as an international offshore financial house or something (memory ceased) of the sort. This Pegging would create additional capital from investors and address the next benefit to be mentioned. Investors will be sure that they are safe to exchange their currency to and from JMD with the security that their money will not lose its high value.
- Benefits of Banks/Investment: There is no doubt this would create a push for investors to go ahead and invest withstanding the bureaucratic barriers which overpower the human entrepreneurial might with abundant Financial and legal fright. This Would equal to a economic boom…. If I am wrong in more jobs…. Rite?
- Address Debts: The Big Push which is needed for our trillion dollar debt bill for a little powerful island in the Caribbean Sea of over approximately 3 million people. The Benefits far out way the dis-advantages of this point.
And many others which I myself might not have thought of as being benefits of this suggestion.
822 words of Economic Views From someone who does not like to write beyond the barriers of three hundred words or on the topic of economics.
So my conclusion is to go ahead with a peg rate for as far as I am concerned we practically have to use the USD a lot across the web, in the power of remittances and for god sakes OUR DEBTS.
These views are sincerely views those of Lance Cameron and will accept every objections and agreements as we are humanely free to judge and make choices. Feel Free to leave a comment below