KINGSTON, Jamaica - A country enters a currency crisis if its exchange rate depreciates by more than 25 per cent in a given year. So far this year, the Jamaican dollar has depreciated approximately 12 per cent, moving from J$93 to US$1 in January to roughly J$104 to US$1 at the moment.
The last time the Jamaican dollar had such a significant depreciation was in 2008, when the exchange rate fell by 11 per cent from $71.59 to US$1 in January to J$80.21 to US$1 in December.
Last year, the dollar depreciated in total just over six per cent for the entire year, and 50 per cent of this depreciation came in the last quarter, from September to December. If the trend continues this year, we can expect the dollar to depreciate beyond $105 to US$1 by December.