The Bank of Jamaica (BOJ) projects that the value of currency it issues will increase by approximately $29.7 billion (11.7 per cent) this month, relative to the stock at end-November 2023 ($253.7 billion)
The projected currency stock of $283.4 billion at the end of December 2023 represents an annual growth rate of 21.2 per cent compared to three per cent for 2022.
The projected growth is consistent with higher cash demand for the calendar year (CY) 2023 to date and reflects continued growth in both real Gross Domestic Product (GDP) and the prices of goods and services.
The projected growth also reflects an increase in vault cash amid a slow return of old currency notes to the central bank.
When the forecasted change in the general level of consumer prices is considered, the currency stock in real terms is projected to increase by 12.9 per cent, which compares to the real decline of 5.8 per cent for the previous year.
BOJ recorded net currency issue of $4.4 billion (1.7 per cent) for the period 01 to 15 December 2023, compared to a net currency issue of $15.0 billion recorded over the same period in 2022.
Consequently, as of December 15, 2023, the stock of currency in the hands of the public, and in the vaults of financial institutions was $258.1 billion
Typically, the BOJ issues and redeems notes and coins daily to meet the demand for cash from individuals and businesses.
There is normally a stronger demand for currency during December, associated with increased spending over the holiday period.
Financial institutions therefore request more currency from BOJ to satisfy this demand.