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The Bank of Jamaica (Jamaican Patois: Bangk a Jumieka) is the central bank of Jamaica located in Kingston. It was established by the Bank of Jamaica Act 1960 [ 3 ] and was opened on May 1, 1961. It is responsible for the monetary policy of Jamaica on the instruction of the Minister of Finance .
Fixed exchange rate; Floating exchange rate; Linked exchange rate; Managed float regime; Dual exchange rate; List of countries by foreign-exchange reserves; Markets; Foreign exchange market; Futures exchange; Retail foreign exchange trading; Assets; Currency; Currency future; Currency forward; Non-deliverable forward; Foreign exchange swap ...
The foreign exchange market (forex, FX (pronounced "fix"), or currency market) is a global decentralized or over-the-counter (OTC) market for the trading of currencies. This market determines foreign exchange rates for every currency. It includes all aspects of buying, selling and exchanging currencies at current or determined prices.
The Jamaica Accords focus was to abolishment of the Gold Standard that the Bretton Woods System had previously established. [9] In order to create a more stable international monetary system, the Jamaica Accords served to create a more versatile foreign exchange rate that focused on a floating foreign exchange rate. [10]
In 2000, Jamaica experienced its first year of positive growth since 1995 due to continued tight macroeconomic policies. [18] Inflation fell from 25% in 1995 to single digits in 2000, reaching a multidecade low of 4.3% in 2004. Through periodic intervention in the market, the central bank also has prevented any abrupt drop in the exchange rate.
A bureau de change is a business which, in competition with other similar businesses, makes its profit by buying foreign currency and then selling the same currency at a higher exchange rate. It may also charge commission or fee on the purchase or sale.
Central banks also play a role in setting currency exchange rates by altering interest rates. By increasing interest rates they stimulate traders to buy their currency as it provides a high return on investment and this drives the value of the corresponding central bank's currency higher in comparison to other currencies.
Central banks can buy or sell foreign currency to influence exchange rates directly. For example, if a currency is depreciating, a central bank can sell its reserves in foreign currency to buy its own currency, creating demand and helping to stabilize its value. High levels of reserves instill confidence among investors and traders.