Samuda

KARL SAMUDA, the minister of industry, investment and commerce, has blasted the Opposition People's National Party (PNP), accusing it of attempting to create mischief by suggesting that he is advocating foreign-exchange control.

"What they are implying is that I am calling for a return to exchange control, but anybody who is saying that doesn't know the language of public finance," Samuda told The Gleaner yesterday.

In an interview with Reuters news agency, Samuda, responding to the question of whether the Government would consider capital controls, is quoted as having answered "we have to".

"The administration needs to make a value judgement on whether to curtail the demand for foreign exchange that we have seen in the last few months," Samuda said in the article.

In a statement yesterday, the PNP declared that Samuda's statement was "most ill-advised and reckless, and potentially very damaging to both trade credit arrangements for Jamaican businesses, and also to the liquidity position of the local financial sector".

The statement was issued by Dr Omar Davies and Senator Mark Golding, opposition spokespersons on finance, and industry and commerce, respectively.

However, Samuda said the interpretation of his statement was flawed.

"If it is interpreted as exchange control, it is abject, utter, complete and absolute rubbish," Samuda said.

He added: "I was expelled from the Jamaica Labour Party (JLP) for calling for the removal of foreign-exchange control. How could I now, at this time of my life, be talking about exchange control?" Samuda asked.

"It has nothing to do with exchange control. It has to do with the containment of the exchange rate going into the market to ensure that there is adequate supply of capital and also to hold discussions to deal with their demand situation and, therefore, to what extent we can control the flow of capital to ensure that they don't come in all at once to put pressure on the dollar," Samuda said.

Retrograde step

Meanwhile, the Opposition said it regarded "any consideration of reintroducing capital controls as an extremely retrograde step, and an act of bad faith towards Jamaican investors who have retained their capital in Jamaica".

"Any such measure will, without doubt, cause panic among investors and result in rapid capital flight, strengthening the resurgence of the black market and the instability in the foreign-currency market," the PNP said.

daraine.luton@gleanerjm.com