For December 2023, Bank of Jamaica (BOJ) projects that the value of currency issued by the Bank will increase by approximately $29.7 billion (11.7 per cent), relative to the stock at end-November 2023 ($253.7 billion) (see Figure 1).
Figure 1
The projected currency stock of $283.4 billion at end-December 2023 represents an annual growthrateof 21.2 per cent compared to 3.0 per cent for 2022. The projected growth is consistent with higher cash demand for the calendar year (CY) 2023 to date, and reflects continued growth in both real Gross Domestic Product (GDP) and the prices of goods and services. The projected growth also reflects an increase in vault cash amid a slow return of old currency notes to Bank of Jamaica.
When the forecasted change in the general level of consumer prices is considered, the currency stock in real terms is projected to increase by 12.9 per cent, which compares to the real decline of 5.8 per cent for the previous year.
BOJ recorded net currency issue of $4.4 billion (1.7 per cent) for the period 01 to 15 December 2023, compared to a net currency issue of $15.0 billion recorded over the same period in 2022. Consequently, as at 15 December 2023, the stock of currency in the hands of the public and in the vaults of financial institutions was $258.1 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 the value of Jamaican notes and coins issued by Bank of Jamaica in a particular period. A portion of these notes and coins will be held by the public (currency in circulation) while some of the notes and coins will be 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: refers to all Jamaican notes and coins that are held outside Bank of Jamaica.
- 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.
