For the period 18 to 21 December 2023, Bank of Jamaica (BOJ) issued currency of $17.5 billion, which was $13.7 billion more than the $3.8 billion it redeemed from the financial system. This net currency issue of $13.7 billion represented an increase of 5.3 per cent in the total stock of currency for the period. The 5.3 per cent increase was higher than the 0.6 per cent increase in the stock for the similar period in 2022.
The net currency issue for the period under review translated to an increase of $18.1 billion or 7.1 per cent in the currency stock for the period 01 to 21 December 2023. This increase was lower than the Bank’s projection for an expansion of 8.7 per cent for the period, and the 7.9 per cent growth in net currency issued for the corresponding period in 2022.
Figure 1
As at 21 December 2023, the stock of currency was $271.8 billion, representing an annual nominal growthof 22.3 per cent, relative to 1.0 per cent at the corresponding period in 2022. When the forecasted change in the general level of consumer prices is considered, the currency stock in real terms is estimated to have increased for the period by 14.0 per cent, which compares to the real decline of 7.6 per cent for the same period of the previous year.
As previously stated by the BOJ in its 18 December 2023 press release, the currency stock is projected to increase in December 2023 by $29.7 billion (11.7 per cent) to $283.4 billion relative to the previous 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.
