Jamaica moving towards a dollarized economy

[Islandman]

Interesting development. I have always been attracted to the idea of a dollarized economy but recognized that if not done with proper preparation it could lead to serious short term problems and economic dislocation.

Perhaps this more organic move towards dollarization is a less disruptive way to get it done. By itself It can't solve the basic problems of production and economic growth but it can lessen the importance of managing the exchange rate and monetary policy.

In 2013, he said, 40 per cent of the deposits were in foreign currency and now it is 45 per cent. "So what is happening is that more and more people are saving in US dollars, and I don't have to explain why people are doing that," said Byles at the EPOC press briefing earlier this month.

http://jamaica-gleaner.com/article/b...-dollarisation

[Assasin]

people save in US dollar because of the continued depreciation of the Jamaican dollar. When the dollar stable they will be less inclined to save in US dollar. This also one of the reason the dollar continue to devalue as people put their money in US dollar because of the stability.

Again another reason why I spoke about the continued devaluation of the Jamaican dollar. More money in US may mean less money in circulation as people use their Jamaican to buy up US dollar and further hardship for people who can't trade or have US dollar account.