The Jamaica Manufacturers and Exporters Association (JMEA) has raised concern, about what it calls, extortionate interest rate spreads.
Deputy President of the JMEA, Richard Pandohie, told Irie FM News that based on International Monetary Fund International financial statistics, Jamaica has maintained the highest interest rate spread, when compared to other countries, and at times, nearly doubled that of the world’s average spreads.
He said, equally concerning, is the difference between the buying and selling of international currencies.
According to the Bank of Jamaica’s Foreign Exchange Trading Summary, as at August 16, local commercial banks purchased US dollars at costs, as high as 138 dollars and 50 cents Jamaican, but sold it, for prices as high as 146 dollars and 25 cents Jamaican.
This indicates, a 5.6% mark-up, the highest mark-up of all the CARICOM countries.
The association has raised questions, over the reason behind these extensive margins.
Mr Pandohie has urged banks, to play their role in advancing the nation’s objectives, by actively reducing the mark-ups, they currently employ.
He said uncompetitive interest rates, persistently impede Jamaica’s competitive advantage, and cripple local productive sectors.
He said, with broader economic certainty, new entrants into the banking sector, declining BOJ interest rates, and a low inflation rate, spreads would be declining, and not be on an upward trajectory.