For the week leading up to the Christmas holidays (13 to 17 December 2021), Bank of Jamaica (BOJ) net issued currency amounting to $6.9 billion, representing an increase of 3.3 per cent in the currency stock for the week. This was in line with the 3.3 per cent increase in the stock for the similar period in 2020.
The net currency issue for the review week translated to an increase of $10.5 billion (5.2 per cent) in the currency stock for the month-to- 17 December 2021. The increase was below the Bank’s projection for an expansion of 5.6 per cent for the period, as well as the net currency issue of 7.6 per cent for the corresponding period in 2020.
Figure 1
As at 17 December 2021, the stock of currency was $215.0 billion, representing an annual nominal growthof 18.3 per cent, relative to 30.3 per cent at the corresponding period in 2020. When the forecasted change in the general level of consumer prices is considered, the estimated real growth in currency for the period is 10.2 per cent, which is below the real growth of 23.9 per cent for the same period of the previous year.
On 13 December 2021, the BOJ issued a press release indicating that the currency stock is projected to end December 2021 at $227.5 billion representing an annual nominal growth of 19.4 per cent.
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.
