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By Treshauna Fillington
Approximately three (3) million tourists visit Jamaica per year via sea or air. With that number of visitors, can you imagine the number of foreign currency passing through our financial institutions? Of course, because even before visitors get here they are booking flights, accommodations, restaurants and so much more in their currency.
To hinder chaos and provide stability in the trading of these multiple currency a regulatory body has to be in place and the bank of Jamaica (BOJ) is the central depository institution that is responsible for governing the foreign exchange market in Jamaica (Forex Jamaica)
So what exactly is the foreign exchange market? It is basically the largest and most liquid market in the world. It is the place where currencies are traded.
It includes the buying, selling or exchanging of currencies at a current or determine rate. This market facilitates international trade and investment by enabling currency conversion.
The BOJ monitors the forex market to promote stability, collect and provides data to the public. On a daily basis trading information is collected and summarize.
For instance, if you want a summary of the trading of the major currencies (USD, CAD, GBP, EUR) you could visit the link https://boj.org.jm/market/foreign-exchange/daily-fx-spot-trading-summary/
The British pound has the strongest value in Jamaica. However, it is the US dollar that is more widely used and accepted especially in tourist areas. In fact, most businesses in the hotel industry price their goods and services in US dollar. Visitors have the option of using USD to purchase goods or services if they do not have Jamaican dollars readily available.
The US Dollar has become so well circulated in Jamaica, that even locals at times opt to use it.
The forex market is driven by the demand or the supply of a currency. Often times when you watch or listen to the business news you may hear the reporter says “the Jamaican dollar weaken or strengthens against the US dollar”.
But what does that mean? A strengthening of Jamaican dollar means that the dollar has increased in value. Hence, you would receive more of a currency when buying. A weaken Jamaican dollar means that it value less and you would receive less of a currency when buying.
Taking part in the forex market can be both risky and profitable. Even though you may know a friend, someone on the street corner or the plaza buying or selling currencies, the BOJ stipulates the authorized dealers.
These are registered commercial banks, merchant banks, building societies, cambios and hotels/resorts. Many of these dealers have several branches located at different location throughout the island.
For a list of the approved commercial banks, merchant banks and cambios in Jamaica, you can visit the BOJ website here
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