WESTERN BUREAU:

Lifting the hopes of the business community, Prime Minister Bruce Golding has hinted at the possibility of a cut in high interest rates on Bank of Jamaica (BOJ) savings instruments.

The prime minister indicated the likelihood of the move during a presentation tagged 'forthright' by members of the Montego Bay Chamber of Commerce and Industry, whom he addressed on-board the cruise ship, Liberty of the Seas, yesterday.

"But it depends not only on the actions of the monetary authorities, but also on the actions of those in the market who make their foreign-exchange earnings available to the market," he told the large gathering.

According to Golding, the possibility of a cut in interest rates also depends on persons limiting their demand to what they need, while being prepared to accept moderate interest rates when they invest in order to enjoy moderate interest rates when they borrow.

Collaboration could stabilise rate

At the same time, the prime minister is convinced that the exchange rate, which is now threatening to destabilise the country, will even out if the collaboration between the central bank governor and major players in the foreign-exchange market is sustained.

There have been growing concerns over the high interest rates on saving instruments such as certificates of deposits.

The BOJ hiked the rates to entice people to invest in the instruments in order to reduce the amount of local cash available in relation to the US dollar and to reduce the demand for foreign currency.

But groups like the Jamaica Manufacturers' Association say this is pushing companies out of business because it is more difficult to access loans.

janet.silvera@gleanerjm.com