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2: Oh, boy…it’s been a strange and really busy time with many things going on all at once, so please bear with us!
3. Although we’ve kept you abreast in several other ways, the last time we took a comprehensive look at inflation trends with a thread here on Twitter, believe it or not, was last November! 🤦🏾♂️Let’s catch up from there.
BOJ's focus on inflation targeting and management of the FX market both have a context, and that context, as we have explained before, is the ongoing economic reform programme supported by both political parties and built on the sacrifice of the Jamaican people: 🧵
#BOJSpeaks
#BOJSpeaks
2. It is the existence of that economic reform programme - fiscal discipline, a flexible exchange rate, inflation targeting, and all - that provides the economic resilience to ensure that the pain of 1 year of COVID-19 and counting is not a hundred times worse.
#FinanceTwitterJA
#FinanceTwitterJA
3. The first and most important thing on the list was a radical shift away from debt-dependence and fiscal dominance towards fiscal responsibility and returning to a private-sector fuelled economy. Without this step first, nothing else on the list would have been possible.
2. Yes, it’s been a minute since our last inflation thread, there’s a lot to catch up on, and we’re sorry it’s been so long, but oh, boy…what can we say? It’s been a strange and hectic year, and like our friends at @rocketshipja would tell you, it’s been a case of:
3. We’ve heard the vicious rumours, too - that we’ve forgotten our fans and followers who read these inflation threads, because we’ve graduated to an inflation TV show and that we “get rich an’ switch.”
Presenting....the ultimate lowdown on inflation, via a Western movie-themed yarn featuring Croc. O. Doyle in his debut acting role as the new Sheriff in town...enjoy!
#BOJSpeaks #FinanceTwitterJA
#BOJSpeaks #FinanceTwitterJA
2. Artistically, the story borrows from and pays parody homage to the spaghetti western film genre, which partially inspired Jamaica’s own global cult classic film, The Harder They Come, and spaghetti western-inspired video games like the Red Dead series.
3. Inflation targeting is rather complex, and not to be compared with the simplicity of shooting at a target, as it’s not really about precisely hitting a static target every single time. Economics in general, and monetary policy in particular, is hardly ever that simple.
2. Yes, COVID-19 stalled STATIN for a bit, delaying the inflation data, but in any case, we also thought it would be in poor taste to keep going on about inflation in the early throes of a pandemic. But now STATIN is back and we’re in economic recovery mode, so here we are.
3. It’s great to have the inflation data to examine again, since inflation is about expectations, and growing pessimism during a crisis is normal, especially without data. It becomes easy for us to fear that all indicators including inflation will run off in the wrong direction.
BOJ invites comments on its recently published discussion paper on Macroprudential Policy Tools. The paper discusses macroprudential policy and effective implementation. This thread highlights the paper; for full details, read it here: bit.ly/39ux0JY
#BOJSpeaks 🧵
#BOJSpeaks 🧵
2. Macroprudential policy entails the use of prudential actions to contain systemic risks, that if realized, would cause widespread implications for the overall financial system and the real economy.
#FinanceTwitter
#FinanceTwitter
3. Effective macroprudential policy requires the ability to detect risk to financial system stability, the formulation and application of appropriate instruments, and the communication of such actions to relevant stakeholders and the public at large.
On Thursday May 7, 2020, BOJ held a virtual press conference to update local and some regional journalists on the recently announced FINTECH Regulatory Sandbox.
#BOJSpeaks #FinanceTwitterJA 🧵
#BOJSpeaks #FinanceTwitterJA 🧵
2. The press conference was addressed by Governor Byles, Deputy Governor in charge of Banking and Currency Operations and Financial Markets Infrastructure, Mrs. Natalie Haynes, and also the Director-General of Jamaica’s Office of Utilities Regulation (OUR), Mr. Ansord Hewitt.
3. The Fintech Regulatory Sandbox became effective on 16 March 2020.
Yes, we know it’s been a rather strange Easter weekend for most of us this year…. #BOJSpeaks 🧵
2. (Apart from the long-time introverts wondering what all the fuss is all about)
3. No regular church service for some…
On Thursday, 02 April 2020, BOJ announced that effective Monday 06 April, 2020, it was prematurely terminating its 19 March 2020 offer to purchase GOJ instruments and redeem BOJ instruments early. Offers were accepted up to Friday, 03 April, 2020. #BOJSpeaks #FinanceTwitterJa 🧵
2. The offer was originally extended until 30 June 2020.
3. When an offer in financial markets is closed early, it is usually a safe assumption that it was tremendously successful, so much so that there is no point in allowing it to run its previously intended course. In this case, that assumption would be correct.
We should all do our best to stay safe and minimize the potential impact of #COVID19, which reminds us that despite the best-laid plans or intentions, bad things will still happen, and economies will at some point have to face a crisis or few. #BOJSpeaks #FinanceTwitterJA
2. This is but one of the very critical reasons why prudent fiscal and monetary policies are so important, and why Jamaica’s ongoing economic reform programme – across both political administrations – was and is so very important.
3. A global crisis makes it more unlikely that the country can turn to anyone else for help, since everybody else will be under pressure. It also compounds the problem by making eventual recovery slower, since other people are less able to buy our goods and services.
You’ve seen our Twitter year in review, complete with “brawta,” but a question remains that’s even more relevant now, with Valentine’s Day love in the air – what were our top tweets for 2019? Which ones got your attention more and to which did you show the most love? #BOJSpeaks🧵
2. Ladies and gentlemen, kings and queens, presenting....our top 10 tweets for 2019....*Drumroll* Are you ready for it? (Stats up to 31 December 2019.)
3. With 28,809 views and nearly 3,000 engagements, coming in at number 10...to start our top 10...very timely... is none other than our 2019 Valentine’s Day post on how economists do Valentine’s Day. Please enjoy it all over again! #EconTwitter #FinanceTwitterJA
As typically reserved central bankers, we’d be content to just let these milestones pass, but the truth is that it’s not really about us, after all – it’s about you, our followers. Our success is yours, so for all our success since inception and in 2019, THANK YOU! #BOJSpeaks 🧵
2. It wouldn’t be a central bank review bank without some statistics – you know you want it! 😉😇 So here goes - the great blue whale of central bank Twitter is @bank_indonesia, with nearly 700,000 followers. However, in relation to a 264 million population, that’s barely 0.27%.
3. We closed 2019 at 5,946 followers, 0.21% relative to a 2.8 million population; not far behind. With 0.44% and 0.41% respectively, @bankofengland and @bankofcanada are better, but the central bank per capita king is @MMA_Maldives at 3% relative to a 531,000 population. Respect.
The December 2019 inflation numbers are a bit hard to swallow, but the good news is that December’s inflation does NOT represent a trend, but instead a temporary spike that we expect to soon recede. #BOJSpeaks #FinanceTwitterJa 🧵
2. There is also a context. The biggest reason for the spike in year-over-year inflation in December 2019 is the continued impact of the November 2019 shock to agriculture, highlighted in the hike in vegetable prices, which proved a bit more persistent than BOJ expected.
3. Monthly inflation (a comparison to the previous month) for December, in addition to a slight reduction in starchy foods, DID reflect the vegetable price reductions we noted earlier, with monthly inflation for vegetables at only 1% compared to 10.6% in November.
With all of the gift-related and other shopping usually involved, the holiday season is actually a very good time of year to remember the merits of inflation that's predictably stable and neither too high or too low. 🧵#BOJSpeaks #LowStablePredictable #nottoohighnottoolow
2. What better time of year, then, to have a friendly elf braving Christmas season traffic and a bit of rain to spread some Christmas cheer, along with token BOJ reminders of the inflation message? Oh, you thought only Santa had elves?
3. You might recognize our 'elf' as the effervescent @DebbieBissoon, but you might not recall that she is the voice on some of our inflation adverts and appeared in one of them: #ICYMI
With crocodiles in the news of late, it's a good time to be reminded that while Agent Croc O. Doyle is a rare individual, office job and all, other crocodiles aren't as sophisticated. 🤓 Regular Jamaican crocodiles do, however, enjoy special status in several ways. #BOJSpeaks 🧵
2. DNA tells us that crocodiles are among the world's oldest living creatures and provide a rare link to the planet's past, since they coexisted with dinosaurs. The crocodile perhaps survived this long because it has no natural predators and hence sits atop the food chain...
3. Closer to home, the indigenous crocodile is, of course, highlighted in BOJ's logo, from which evolved agent Croc O. Doyle...
A temporary shortage in the FX market does not necessarily mean a FX shortage for the country/economy.
#BOJSpeaks #FinanceTwitterJa A THREAD 🧵
#BOJSpeaks #FinanceTwitterJa A THREAD 🧵
Part 2
After accounting for FDI financing of imports, the Balance of Payments shows that since FY2015/1, Jamaica has roughly been earning as much as we spend. There can be no national shortage unless that big picture changes.
After accounting for FDI financing of imports, the Balance of Payments shows that since FY2015/1, Jamaica has roughly been earning as much as we spend. There can be no national shortage unless that big picture changes.
Part 3
Demand may not always be met, but FX market inflows have increased, not declined. 2019 so far shows average daily inflows at just over US$33 million. This is above the US$31.5 and US$30.63 million daily averages for 2018 and 2017 and more than the current 5 year average.
Demand may not always be met, but FX market inflows have increased, not declined. 2019 so far shows average daily inflows at just over US$33 million. This is above the US$31.5 and US$30.63 million daily averages for 2018 and 2017 and more than the current 5 year average.
We’re afraid that the headline on this @JamaicaObserver story is incorrect and may have sent members of #FinanceTwitterJa and others down the wrong track... 1/3 #BOJSpeaks
bit.ly/364UDH8
bit.ly/364UDH8
@JamaicaObserver To clarify, the repo operation in question serves to provide liquidity, not ‘mop it up.” (Mopping up isn’t a thing these days.) This is the same routine weekly J$ auction BOJ does each Monday, done on a Friday this time because the coming Monday was a public holiday... 2/3
@JamaicaObserver Simply put, it’s similar to an FX auction (which is in $USD), except we’re lending money in $JMD, not selling. We announce the amount and banks bid with interest rates. Those allocated receive cash which they pay back w/ interest and give BOJ securities to hold as collateral. 3/3
