Nigel Clarke: Jamaica debt not threatened by Ukraine crisis

Nigel Clarke
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Nigel Clarke: Jamaica debt not threatened by Ukraine crisis

Minister of Finance and the Public Service Minister Dr Nigel Clarke says that there is no need for an alarm about the possible effect of the Ukraine crisis on Jamaica’s debt situation.

“We have made some amount of provisions for the environment in which we are, and those provisions are guided by input from the central bank,” Clarke told fellow Members of Parliament during the opening session of the Standing Finance Committee of the House of Representatives on Tuesday.

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Clarke was responding to questions raised by Opposition spokesman on finance Julian Robinson on the possible impact of the European crisis on the country’s outstanding debt commitments.

Robinson wanted to know if the Bank of Jamaica’s interest rate continues to rise, what provisions have been made to deal with the additional debt servicing burden.

He pointed out that based on the Government’s debt management strategy documents, a one per cent increase in debt obligations would add an additional $6.5 billion to the total, in both domestic and external debt servicing costs. Robinson was also interested in finding out what is in the budget as a buffer to ensure that the country would still be able to manage its debt servicing during the crisis.

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Admitting that the language used in the documents could be a little more precise, Clarke responded that the argument about the impact of a “one per cent” movement in interest costs, relates to the interest that is paid across the board, across all categories of debt.

“But, recall that a large portion of our debt is fixed price debt. So, we have bonds that have been issued, and a coupon rate does not change if interest rates go up. We have debt with multilateral institutions at fixed prices that do not change, if interest rates go up,” explained Clarke.

Ja’s debt repayment not threatened by Ukraine crisis, says Clarke  Jamaica Observer


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