During the last ten work days of 2022 (19 to 30 December), Bank of Jamaica issued $13.7 billion more in currency than it redeemed from financial institutions (commercial banks, building societies and cambios). This net currency issue contributed to an overall growth of $27.7 billion or 13.4 per cent in the currency stock for December 2022 compared with the previous month. This was higher than the Bank’s projection for month-over-month growth of $21.5 billion or 10.4 per cent in December. The rate of growth in currency issue for the month was higher than the 11.0 per cent growth recorded for December 2021.
Figure 1
At 31 December 2022, the stock of currency was $233.8 billion (see Figure 1above), representing an annual nominal growth of 3.0 per cent, compared with an annual growth of 19.1 per cent at the end of December 2021. When the estimated change in the general level of consumer prices for 2022 is considered, the currency stock in real terms is estimated to have declined for the year by 7.0 per cent, compared to real growth of 11.0 per cent for 2021.
The Bank anticipates that most of the currency issued during December 2022 will be redeemed during January 2023. For the last five years, net currency redemption in January averaged 76.5 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 institutions have a demand for cash. The difference between currency issued and that which is 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.
