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The Bank of Jamaica in downtown Kingston, Jamaica (Photo: Jamaica Observer)

Bank of Jamaica profits growing

The Bank of Jamaica in downtown Kingston, Jamaica (Photo: Jamaica Observer)

The Bank of Jamaica (BOJ) is showing further signs of increased profitability with year to date profit growing to $19.16 billion.

A view of the Noel Nethersole statue standing in front of Bank of Jamaica in downtown Kingston, Jamaica. (Photo: Miami Herald)

This profitability position puts the BOJ, Jamaica’s central bank, in a better position to defend the local currency against wild swings, which have been the order of the day in recent times.

The primary role of the BOJ is not to make a profit but to formulate and implement monetary policy to maintain price stability, ensure the maintenance of a sound and efficient financial system, and meet the public’s currency needs.

However, in executing its duties, the BOJ does incur a profit or loss. The BOJ’s latest balance for May 27, 2020, showed that it has almost doubled the amounts owing to Government, which moved from $21.8 billion in May last year to $44.48 billion as of April 13 this year.

The year to date profit of $19.16 billion is reflected in the amounts owning to Government. Losses incurred by the BOJ are funded by the Government of Jamaica (GOJ), while profits earned by the central bank are due to GOJ.

There was a marked reduction in financial institutions’ advances, which moved to $16.6 billion as of April 13, 2020. This was coming from $28.3 billion, which was advanced as of May 27 last month.

Periodically, the BOJ advances funds on a short-term basis to financial institutions in need of liquidity support. The central bank suffered a decline in its total assets, which moved from $862 billion in May 2019 to $796 billion for the period under review.

–Durrante Pate