With the JA$1000 note now worth US$11, the BOJ is set to release a new JA$5,000
note (US$55) into circulation on Monday

The Bank of Jamaica (BOJ) today confirmed speculations that a new note – denominated JA $5,000 – will be introduced from Monday, May 18, 2009 (photo at the end of this post).

As Jamaica’s economy sees a high debt burden, rising inflation and a falloff in exports, the value of the Jamaica dollar has plummeted, such that even this new bill will only be worth US$55 at the current exchange rate.

Jamaica’s long-standing highest denominated bill was JA$1,000, now worth less than US$12.

Early reaction out of the island suggests that an overwhelming majority of Jamaicans are against the introduction of the new note.

Comments on the Jamaica Gleaner blog have drawn comparisons between Jamaica and Zimbabwe, with (unfounded?) speculation that the country will soon be returning to the International Monetary Fund. Others seem to have resigned themselves to waiting for a subsequent announcement: that of a JA$10,000 bill. Says one commentator, with the highest US dollar note being the $100 greenback, a JA$5,000 bill is “just the tip of the iceberg”.

New note features late Prime Minister Hugh Shearer

Meanwhile, the Bank of Jamaica has not given any official rationale for the introduction of the new note, and the media is actually downplaying speculation that that the introduction of the note has anything to do with the state of the economy or an immediate demand for a bigger note to store value. In fact, the Gleaner even suggests that the move was ‘more likely driven by a wish to celebrate the life of Hugh Shearer’ – an assumption they likely made due to the fact that the note’s launch on May 18 will also be Shearer’s birthday.

What the Gleaner did not mention however is that the value of the JA$1,000 has plummeted by fifty percent since it was launched eight years ago: in 2001, when the JA$-US$ exchange rate was 44.8:1, the $1000 note was worth US$22 – now, it is worth just US$11.2. When governments want to celebrate a former leader they launch stamps – when governments launch a $5,000 note, there is nothing to celebrate.

The Government of Jamaica under Finance Minister Audley Shaw presented its budget on April 23rd, announcing a range of much-protested taxes aimed at meeting a shortfall in the government’s revenue.

On the same day that Jamaica launches its new note, the Government of Barbados will also present its budget, which comes on the heels of a dire warning by Standard & Poor’s that Barbados’ 2:1 peg to the U.S. dollar is also in jeopardy, given government’s debt and spending. In addition, Moody’s is also considering downgrading Barbados’ ratings over its increasing debt.

Related articles:

1. Jamaica reshapes tax package after public outcry

Antillean · Bridgetown, Barbados

The Antillean is a pan-Caribbean nonprofit media outlet, covering news, features and opinions on social issues in the Caribbean region and the wider Americas. Our mission is to encourage conversation on, and enhance the visibility of, social currencies within the hemisphere – issues which are often underreported in the mainstream media.

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