For December 2022, Bank of Jamaica projects that the value of currency issued by the Bank will increase by approximately $21.5 billion (10.4 per cent), relative to the stock at end-November 2022 ($206.1 billion) (see Figure 1). The forecast for the month is below the five-year average growth rate of 15.2 per cent for the month of December.
Figure 1
The projected currency stock of $227.6 billion at end-December 2022 represents an annual nominal growthof 0.3 per cent compared to 19.1 per cent for 2021. This lower growth reflects a moderation in cash orders for December 2022 relative to the orders for the same period in 2021, the latter period reflecting high demand for precautionary cash in the context of the Covid-19 pandemic as well as strong growth in remittances. The deceleration has also occurred in the context of a trend increase in the use of electronic means of payments.
When the forecasted change in the general level of consumer prices is considered, the currency stock in real terms is projected to decline by 9.4 per cent, which compares to the real growth of 11.0 per cent for the previous year.
BOJ recorded net currency issue of $5.3 billion (2.6 per cent) for the period 01 to 09 December 2022. This compares with a net currency issue of $4.6 billion recorded over the same period in 2021. Consequently, as at 09 December 2022, the stock of currency in the hands of the public and in the vaults of financial institutions was $211.4 billion (see Figure 2).
Figure 2
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.
