Shaw: IMF Agreement close..Interest Rates to be reduced

[Don1]

.....expect accelerated depreciation of the dollar.

We are close to an agreement - Shaw


Thursday, November 19, 2009

FINANCE Minister Audley Shaw expressed confidence last night that Jamaica was close in inking a deal with the International Monetary Fund (IMF).
The minister, in responding to Moody's concerns about the IMF negotiations, said the Fund has already issued two statements declaring that progress has been made.

He, however, did not directly address the downgrade by Moody's.
"I can tell you that we are now in the process of preparing the Letter of Intent. The agreement is written in the form of the Letter and all the issues have been pinned down," said Shaw.

He added: "At this time I cannot give a definitive date as to when the agreement will be signed as that would appear pre-emptive and besides we all have to be respectful of the IMF's internal processes. What I can say is that we are close to an agreement.

"I can put firmly on the table that this Government is committed to reducing interest rates. It is now a fundamental feature of our debt management strategy and the IMF also shares that view. I am calling on all stakeholders and the entire country to co-operate with the Government in reducing interest rates," Shaw said.

[Assasin]

Now you stop complaining about the botch negociations?
Always something new to whine about eeehh?

Do you subcribe to the high interest rate policy? Can't we have managed devaluation, moderate interest rate and modest growth?

Did you not expect lower interest rate from an IMF deal?

Also didn't Latti firing affect the negociation? It may have speed it up. It has been two weeks since he left.

[Mosiah]

negotiation

[Assasin]

thanks.

for some reason I am stuck with that.

[Mosiah]

that's okay. even some who remind us about the good school they attended screw up all the time.

[Don1]

Assasin;199533]Now you stop complaining about the botch negociations?
Always something new to whine about eeehh?

Yes

Do you subcribe to the high interest rate policy? Can't we have managed devaluation, moderate interest rate and modest growth?

I subscribe to progress. If this new policy will bring that...I subscribe to it. Let's see what happens.

I merely noted that cheaper money usually leads to inflationary pressures..including an inflated currency...especially in Jamaica's case.

People will use the cheaper money to hoard US$ or invest in US$ denominated instruments and put extreme pressure on the JA$ exchange rate....let's see if the IMF credits can contain that for a sustained period...should be interesting.

Did you not expect lower interest rate from an IMF deal?

Since I'm not privy to the negotiations I don't know what to expect. The IMF has changed considerably from when we were last entangled with them.
Perhaps you know what will happen...I don't.

Also didn't Latti firing affect the negociation? It may have speed it up. It has been two weeks since he left.

Speculation...or you have insider info? I will ask mi bredrin Trevor Alleyne for the inside scoop when the dust settles...ok?

The firing itself was farcical...any objective observer can see that.

I have long reached the stage where it is difficult for a politician to deceive me...I usually see right through the ridiculous reasoning and tomfoolery.

I leave that stuff for sycophants and the naive.

[Assasin]

If you believe all that you just said, how comes you come to the conclusion that " accelerated depreciation of the dollar."

Don't you have to base it on something? You can't just come with your "prophet" warnings without explaining. What are you basing it on.

[Don1]

If you believe all that you just said, how comes you come to the conclusion that " accelerated depreciation of the dollar."

Don't you have to base it on something? You can't just come with your "prophet" warnings without explaining. What are you basing it on.

I base the prediction on economic theory...and explained it above by reference to the likely use of cheap money in a situation where there is an extreme lack of confidence in the currency...a barometer for lack of confidence in the economy.

In economics every action has a price...you seem to believe that this is not so...the likely price for cheaper money is increased inflation...including an inflated currency....popularly called devaluation.

This inflation will not materialize IF money will be largely saved (deferred consumption) or directed at productive enterprises which earn hard currency...do you see that happening in today's Jamaica?

I don't.

Simple.

[Assasin]

Is 15 or 12 borrowing cheap money? Do you factor in the other things such as the shortage of cash in the current recession? Do you factor in the other changes that the IMF will bring? The fact that the IMF is backing the government presents some confidence. Has there been rapid devaluation under the IMF in Jamaica? or it is the opposite?

It is not as simple as you want to make it.

[Don1]

Is 15 or 12 borrowing cheap money? Do you factor in the other things such as the shortage of cash in the current recession? Do you factor in the other changes that the IMF will bring? The fact that the IMF is backing the government presents some confidence. Has there been rapid devaluation under the IMF in Jamaica? or it is the opposite?

It is not as simple as you want to make it.

ok..I made my devaluation prediction if a lower interest rate policy is aggressively pursued...feel free to make yours.

I am not claiming that this is necessarily a bad policy...I am just saying that this is one probable outcome of a low interest rate policy...a downside.

The upside may be that our exports will be cheaper and therefore more competitive and will grow faster.

Imports will be more expensive and will not grow as fast...so the trade deficit may be reduced....and the balance of payments managed better.

Good & Bad will result...but the poor will be squeezed and pay the biggest price due to inflation.

[Assasin]

yeah now you talking. It is possible that there will be some devaluation but the IMF a look for stability and all you talking maybe true.

The fact is Bruce and Shaw better start doing some work and educate the people and no bother with the politrix because the work just start.

Based on our history the dollar fly faster without the IMF

[Muadib]

Good ting Bruce fling in di Tax break, School Fees break and Health Cost Break...

Nice cushion..

lol !

[TDowl]

Who is this guy Idol?