Hyman rejects pegging Ja dollar to US

Financial analyst Ralston Hyman is rejecting the suggestion by former Prime Minister Edward Seaga that the Jamaican dollar be pegged to the US currency.

The pegging of the currency means that the value of the US currency would be at a prescribed ratio to the Jamaican currency.

However, Hyman said this approach could create problems when the market is taken out of the process and the rates are arbitrarily set by a group of individuals.

Yesterday, in renewing the proposal for a pegged exchange rate Seaga said it would facilitate potential massive inflows of low-interest foreign exchange for mortgage financing and investment.

He argued that this would be possible since the risk of devaluation or depreciation of the rate of exchange would no longer exist.

radio@gleanerjm.com