During the last six work days of December 2024 (20 to 31 December), Bank of Jamaica (BOJ) issued currency of $9.3 billion and redeemed $0.2 billion from the financial system. This net currency issue of $9.1 billion for the period contributed to an overall growth of $21.1 billion or 8.0 per cent in the currency stock for December 2024 relative to the previous month. The rate of growth in currency issue for the month was lower than the Bank’s projection for growth of $24.4 billion or 9.2 per cent and also lower than the 9.3 per cent growth recorded for December 2023.
Figure 1
At 31 December 2024, the stock of currency was $286.1 billion (see Figure 1 above), representing an annual increase of 3.1 per cent, compared to an annual growth of 18.7 per cent at end-December 2023. This deceleration is consistent with a moderation in the growth in nominal GDP, reflected in part in lower inflation. When the estimated change in consumer prices is considered, the currency stock in real terms is estimated to have declined by 0.9 per cent over the period, compared to the real growth of 11.1 per cent for the corresponding period in 2023.
The Bank anticipates that the majority of the currency issued during December 2024 will be redeemed during January 2024. For the last five years, net currency redemption in January averaged 77.4 per cent of the net currency issued in the preceding month.
Background
Typically, Bank of Jamaica (BOJ) issues and redeems notes and coins daily in order to meet the demand for cash from individuals and businesses. There is normally a stronger demand for currency during the month of December, associated with increased spending over the holiday period. Financial institutions therefore request more currency from BOJ to satisfy this demand.
Glossary:
- Currency Issue: refers to Jamaican notes and coins in the hands of the public (currency in circulation) in addition to notes and coins held by financial institutions in their vaults (vault cash). Bank of Jamaica redeems (buys) or issues (sells) notes and coins to financial institutions when the institutions have a demand for cash. The difference between currency issued and currency redeemed during a period of time is referred to as net currency issue.
- Currency Stock or Currency in Circulation: (see Currency Issue)
- Real Currency Growth: reflects the percentage change in the real stock of currency which is calculated as the nominal currency stock divided by the consumer price index (CPI) at a given point in time.
