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Shaw insists private sector will accept lower interest rates
2010-01-07 09:24:11 | (1 Comments)
The Finance Minister, Audley Shaw is insisting that the private sector will accept lower interest rates on government paper.
His comments come amid reports that there has been a poor response to the two most recent instruments issued by the Bank of Jamaica.
The Government has committed to reducing the rates of interest it pays on instruments to force investors into the productive sector.
The conviction is that if investors opt to go into production, there would be more employment and more opportunities for Jamaica to earn foreign exchange.
This would ultimately mean more revenues for the Government and so it would not need to borrow as much money locally and overseas to run the country.
So the Bruce Golding led administration has started the process, with the Central Bank slashing interest rates by more than 6 percentage points in 27 months.
However, since the last rate cut on December 18, the market has not responded favourably to the BOJ issues.
In the two latest offers, the BOJ was trying to raise $19 billion for the Finance Ministry through Government paper.
However, it only managed to raise $1 billion.
Audley Shaw said the market’s response should not be measured against the interest rate cut.
He is suggesting that the lack of interest in the offer was because of Jamaica’s debt situation.
Mr Shaw says he has consulted with investors and they have signalled that they will accept lower interest rates on Government paper.
He also said Government agencies have been told that they will have to accept lower interest rates.
http://go-jamaica.com/news/read_article.php?id=15793
2010-01-07 09:24:11 | (1 Comments)
The Finance Minister, Audley Shaw is insisting that the private sector will accept lower interest rates on government paper.
His comments come amid reports that there has been a poor response to the two most recent instruments issued by the Bank of Jamaica.
The Government has committed to reducing the rates of interest it pays on instruments to force investors into the productive sector.
The conviction is that if investors opt to go into production, there would be more employment and more opportunities for Jamaica to earn foreign exchange.
This would ultimately mean more revenues for the Government and so it would not need to borrow as much money locally and overseas to run the country.
So the Bruce Golding led administration has started the process, with the Central Bank slashing interest rates by more than 6 percentage points in 27 months.
However, since the last rate cut on December 18, the market has not responded favourably to the BOJ issues.
In the two latest offers, the BOJ was trying to raise $19 billion for the Finance Ministry through Government paper.
However, it only managed to raise $1 billion.
Audley Shaw said the market’s response should not be measured against the interest rate cut.
He is suggesting that the lack of interest in the offer was because of Jamaica’s debt situation.
Mr Shaw says he has consulted with investors and they have signalled that they will accept lower interest rates on Government paper.
He also said Government agencies have been told that they will have to accept lower interest rates.
http://go-jamaica.com/news/read_article.php?id=15793