Historical Sketch

Christopher Columbus discovered the island for the Europeans in 1494 and called it Isla Santiago. Spanish settlement began in the early 16th century and continued for the next 150 years. In 1655, England occupied the island and due to the ongoing fight between the colonial powers Jamaica flourished as a harbor of piracy. In 1670, Spain recognized the English claim and ceded the island. During the English rule the name Jamaica became common. The possession was restyled crown colony in 1866 with limited interior autonomy after the Second World War. In 1958, Britain attempted to unite the different Caribbean colonies into the West Indian Federation which failed already four years later as Jamaica voted for independence in a referendum.

Monetary History Overview

The Caribbean had always been an important station on the trade routes between the Spanish American possessions and Europe. Thus, Spanish trade coins got introduced and dominated the payment transactions, predominantly the so-called "Spanish Dollar", the eight Reals in silver. The isolation of the islands brought scarcity of specie and thus caused an overvaluation of the trade coins compared with the European markets. In the English possessions, various "accounting Shillings" emerged which were determined by the local valuation of the Spanish trade coins, differing considerably from the metropolitan rating of 50 Pence Sterling per Spanish Dollar. In 1825, the Pound Sterling became the sole currency for all British possessions. The dominance of Spanish trade coins in payments did not change for the time being. In the mid-19th century, however, the local accounting currencies were abolished everywhere, which corresponded to a massive devaluation of the local money. In Jamaica this was done in 1841, and as the Spanish Dollar had been traded at 83⅓ Pence, it amounted to 40%. British currency was introduced afterwards, and the Spanish Dollar remained tolerated until 1876.

Since the British copper coins were unpopular and not adapted to the climate, they were replaced by local subsidiary coins made of copper-nickel alloy in 1869. Paper money issuance by commercial banks had started in the late 1830s. In 1904, two laws were passed to both regulate private money issuance and to establish state paper money, which were circulating alongside. The Jamaican Pound became the national currency at par with the Pound Sterling. In 1920, the Currency Commission took over monetary affairs. The private issuance was dominated by Barclay Bank, and the 1954 Bank Notes Law forced all other banks to give up. Four years later, private issuance was ended altogether. In 1962, Jamaica attained independence. Already the year before, the Currency Commission had given way to the Bank of Jamaica to take over as central bank. In 1969, the currency was decimalized, and the Jamaican Dollar at half a Pound became the new unit. The Sterling peg was kept unchanged until 1973, when the Dollar repegged to the US currency. In 1978, the exchange rate got floated, which destroyed more than 95% of the Dollar's value until the early 1990s. Since then, the decline of the Jamaican currency has slowed down, but continues steadily.

Jamaica joined the International Monetary Fund (IMF) on 21.02.1963.

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