Jamaica’s pension industry is already projecting foreign exchange (FX) gains from the recent move by the Bank of Jamaica’s (BOJ) to increase the allowable limit on investment in foreign exchange instruments from 7.5 per cent to 10 per cent.
The increase in the FX cap comes into effect April 1, 2021. Pension experts believe the move will help to strengthen the sector. The Pension Industry Association of Jamaica (PIAJ) reports that the second of the two-part adjustment is aligned to the needs of its members.
This is largely because the adjustment allows for further diversification of their asset base, thereby improving resilience to market dynamics.
According to PIAJ President Sanya Goffe, “this development will support the increased ability for pension funds to hedge against the impact of depreciation in the Jamaican dollar, inflation and, by extension, will deliver an increase in foreign exchange gains over the medium to long term.”
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