Monday, January 22, 2018

Reckless call for devaluation *

Why does the IMF (International Monetary Fund) keep insisting this country's currency is “overvalued”? How does one arrive at a “correct” value? Is there indeed such a thing? Who benefits and who loses when a country devalues its currency?

I was a medical student at Mona, Jamaica, in 1972. At that time, I recall that the exchange rate was almost $5 to Ja$1. At Papine and Ligueny, a tasty Jamaican patty would cost less than Ja$1.

According to data from the Bank of Jamaica in 1972, US$1 equated to Ja$0.77. I am sure that the politicians in that country were pressured, lied to, tricked and increasingly coerced to devalue their “overvalued” currency.


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