For the week leading up to the Christmas holidays (12 to 16 December 2022), Bank of Jamaica (BOJ) issued currency of $8.7 billion more than it redeemed from the financial system. This net currency issue represented an increase of 4.1 per cent in the total stock of currency for the week. The 4.1 per cent increase in the currency stock was higher than the 3.3 per cent increase for the corresponding week in 2021.
The net currency issue for the week under review translated to an increase of $14.0 billion or 6.8 per cent in the currency stock for the period 01 to16 December 2022. The increase, which was in line with the Bank’s projection for an expansion of 6.8 per cent for the period, was higher than the net currency issue of 5.6 per cent for the corresponding period in 2021.
Figure 1
As at 16 December 2022, the stock of currency was $220.1 billion, representing an annual nominal growthof 1.9 per cent, relative to growth of 23.0 per cent at the corresponding point in 2021. When the forecasted 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 period by 8.0 per cent, compared to real growth of 14.6 per cent for the same period of 2021.
As previously stated by the BOJ in its 15 December 2022 press release, the currency stock is projected to increase in December 2022 by $21.5 billion (10.4 per cent) relative to the previous monthto reach a level of $227.6 billion.
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.
- 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.
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