BOJ Governor warns of risks in credit expansion

Brian Wynter, Governor of the Bank of  Jamaica (BOJ), has warned of an inflationary impact if  there is an imbalance in the growth in private sector credit.  He says there are risks if  the expansion in credit is not accompanied by increased production.

"Then, you'll see.. we are more likely to get an inflationary impact, or an exchange rate and balance of payments problem that then contributes to inflationary impact," Wynter explained while speaking at the BOJ's quarterly press briefing on Monday.

He clarified, however that there there is no need for concern regarding the 14.4% increase in private sector credit during the 12 months to June, declaring that "credit expansion to provide steady growth of businesses that are investing to produce, that creates more output and that is done in a productive way, is not inflationary."

That, he said, is what the central bank and its technical teams "will keep gauging as we look at the performance."