Finance Minister Audley Shaw says too many interests are chasing after foreign currency, and has warned that public bodies who compete for the dollar and then hoard it will be reined in.

Shaw on Wednesday, having linked the high demand for US dollars to the increasing price of consumer goods and the erosion of purchasing power, says government would no longer tolerate its own agencies acting in a manner that drives down the value of the Jamaican currency.

The value has been driven down consistently in the past year, hitting $85 against the USD last week, forcing the Bank of Jamaica back into the market to sell cash to ease demand pressures.

The dollar closed at $85.31 on Wednesday.

"Part of the problem is that we are not managing the treasury adequately," the Finance Minister said at the JSE Capital Markets and Investment Conference underway in Montego Bay since Tuesday.

"There are too many public sector bonds that are out there competing for dollars in an uncoordinated way. We are going to draw them up," he said, "we are going to straighten them out."

Not only does it impact consumers, but businesses ultimately suffer, Shaw said, when sales fall.

"We cannot afford to have public sector bodies holding foreign exchange, and won't sell it into the market, and I am sending this warning to them, I am not going to tolerate it, " declared Shaw.

Exchange rate position

"We are not going to tolerate public sector bodies taking positions that will drive down my exchange rate. It is untenable and intolerable and I am not going to accept it."

Shaw also took issue with persons, whom he said were giving lip-service to social partnership while at the same time pursuing selfish positions by insisting that the banks set a new threshold each day on the transactional value of foreign exchange to boost their holdings.

"We are in one country, many of those who are seeking to drive down the dollar in that way by getting a few extra cents here and a few extra cents there are going to lose out in the long run," he said.

Drawing reference to the multilateral loan funds secured by Jamaica, Shaw said it was to be seen as a sign of international confidence.

"If these multilaterals can be demonstrating such confidence in Jamaica, why aren't we demonstrating the same confidence in ourselves," he asked.

"I believe that is a pretty good rhetorical question that needs to be answered."

adrian.frater@gleanerjm.com