BOJ competititve auction system unclear - says IMF

The International Monetary Fund (IMF) says it is not yet clear how the competitive auction system the Bank of Jamaica is planning will affect exchange rates.

The IMF says the system will create more efficiency in the market but added that it will have to await research, before it is able to say how much influence the competitive auction will give the BOJ over the outcome of exchange rates.
However, the international lending agency admitted that depending on the frequency of the auctions, the results could provide a basis for a market based reference rate for currency traders.
The Bank of Jamaica is planning to move to a competitive auction for foreign currency under which it will sell first to the highest bidder and buy first from the lowest seller.

Anti-money laundering framework

The IMF says the Bank of Jamaica is working to address the deficiencies that were highlighted in Jamaica's anti-money laundering framework.

Those deficiencies were highlighted by a Caribbean Financial Action Task Force Mutual Evaluation Report.

The deficiencies have resulted in the loss of some of Jamaica's correspondent banking relationships.

However, the IMF says the authorities have indicated that they intend to fix the issues by improving oversight for the money service business sector and strengthen transparency of the beneficial ownership of legal entities.   

Concerning the global economy - the IMF's chief economist Maurice Obstfeldt  said it seems to be gaining momentum.
The IMF's new World Economic Outlook forecasts global growth this year of 3.5%, up from 3.1% predicted in 2016.

But the multi-lateral financier warns of head winds that could weaken its global projections. It says the possibility of protectionism and what the report calls "trade warfare" could put a spoke in its forecast.

But the dominant tone of the report is brighter than it has been for some time.

For much of the period since the financial crisis of 2008 the IMF has worried that the recovery was failing to generate momentum.    

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