Does IMF back dollar plunge?
Published:Sunday | March 31, 2013 | 12:00 AM
THE EDITOR, Sir:
With regard to the announcement by Finance Minister Dr Peter Philips that Jamaica has secured approval from the International Monetary Fund (IMF) on an extended fund facility by the end of March, are we ignoring the elephant in the room?
Is there a basis to deny that an unstated preconditionality of the IMF is that the Jamaican dollar should reach the new low of J$100 to U$1 before an agreement is signed? There is a not-unusual clamour that the Jamaican dollar is overvalued. Is this a shared position by the IMF and, therefore, an implicit, if cynical, requirement that the magical low be attained before anything else happens?
The effect of doing it this way is that when the dollar reaches the 100:1 mark, no one can blame the IMF. The suggestion that the delay is caused by a failure of the Washington Consensus, the IMF, World Bank and the Inter-American Development Bank to agree on their share of US$750 million is a facile oversimplification.
The relative sums involved are tantamount to petty cash for those institutions. All this is as another precondition yet unmet. My hope is that it is 100:1, but it could be 150:1. Who knows, and who cares? Certainly not the IMF.
GARNETT ROPER