Daniel is Founder and CEO of FXcompared and FXC Intelligence and has 18 years of experience in the international finance world focusing on cross-border payments, technology and the property sectors. Daniel is widely quoted as an expert within the money transfer industry including by The Economist, The Wall Street Journal, Reuters, CNBC and Bloomberg. Daniel is passionate about helping consumers and businesses find the best and most efficient ways to transfer money internationally.

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Summary

Jamaica liberalised its foreign exchange market in 1991 and does not apply restrictions to incoming or outgoing international money transfers. Foreign exchange payments are critical to Jamaica’s economy, which relies heavily on tourism receipts, remittances, and commodity exports. The Jamaican dollar (JMD, J$) is fully convertible and foreign exchange can be easily obtained through the formal currency market.

Jamaica's money transfer regulations

Jamaica allows capital to move freely in and out of the country, whether for trade or other current payments or for investment capital transfers. The government allows investment capital and proceeds to be freely repatriated, as it works to encourage higher levels of foreign direct investment (FDI) in an effort to drive economic growth.

Jamaican law requires that all foreign exchange operations must go through authorised forex dealers, including licensed financial institutions and cambios (foreign exchange traders), or bureaux de change. While unrestricted, the Jamaican forex market is comparatively small, so companies often acquire large amounts of currency over a period of several days to avoid destabilising the market.

There are no restrictions on the amount of hard currency that travellers may carry in or out of Jamaica at one time.

Foreign exchange drivers

Jamaica’s economy relies heavily on the foreign exchange market. Tourism is a major driver of foreign exchange receipts, and it has largely withstood the impact of the global economic downturn. Remittances from Jamaicans living abroad are another key driver of forex demand, which is characteristic of island economies. Tourism and remittances each contributed approximately 30% of Jamaica’s GDP in 2013. Exports of bauxite and aluminium accounted for another 5% of GDP, creating steady demand for settlements in foreign currency.

The country relaxed its crawling exchange rate system in 1990, under which the value of the Jamaican dollar was allowed to fluctuate within a narrow band linked to the US dollar; today, the JMD exchange rate is determined by market supply and demand.

On Jamaican platforms, the JMD is predominantly exchanged against the USD, followed by the Canadian dollar (CAD) and the pound sterling (GBP). For example, the USD accounted for 88% of daily foreign exchange volume in late November 2014 (US$27.3m per day), followed by roughly 6% for CAD (US$1.8m) and 4% for the GBP (US$1.2m).

Jamaica's regulatory authority

The central bank, the Bank of Jamaica (BOJ), is the country’s sole monetary and financial authority. Under the country’s flexible exchange rate system, the central bank intervenes occasionally to address conditions of surplus supply and maintain exchange rate stability.

The BOJ’s Banking and Market Operations Division provides oversight of the financial sector and payment systems. The same division is responsible for the supervision and licensing of all cambios and bureaux de change. As of mid-November 2014, the BOJ counted 66 active cambios.

Currency

Jamaica’s monetary unit, the Jamaican dollar (JMD) is abbreviated as J$ or simply $. The Bank of Jamaica issues banknotes in denominations of $50, $100, $1,000 and $5,000. Coins are issued in values of 1c, 10c and 25c, and $1, $5, $10 and $20.