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Jamaican Dollar (JMD)

The official currency of the Caribbean Sea nation of Jamaica

What is the Jamaican Dollar (JMD)?

The Jamaican Dollar is the official currency of the Caribbean Sea nation of Jamaica, which was part of the British West Indies prior to becoming an independent country in 1962. The Jamaican dollar, designated as J$ or JA$, is divided into 100 cents. However, the country’s central bank – the Bank of Jamaica – discontinued the minting of the 1-cent coin and 5-cent coin in 2018.

 

Jamaican Dollar (JMD)

 

The foreign currency exchange market symbol for the Jamaican dollar is JMD. For example, the exchange rate for the Jamaican dollar relative to the US dollar is expressed as USD/JMD.

 

Summary

  • The Jamaican Dollar is the official currency of the nation of Jamaica. 
  • Jamaica’s official language is English, but as a practical matter, the language most commonly spoken on the island is Jamaican Creole, also known as Jamaican Patois.
  • The current composition of Jamaican banknotes serves to extend the bills’ lifespans.

 

The History of Money in Jamaica

The creation of the Jamaican dollar followed Jamaican independence by about seven years, with the new currency being introduced in 1969. In the interim, the British West Indies dollar and the Eastern Caribbean dollar were the island’s primary currency; although, remarkably, Spanish pieces of eight were also still in circulation, despite the fact that Spain’s ownership of the island was more than 300 years in the past.

The first currency used in Jamaica was Spanish, as Jamaica was under Spanish control in 1494 with the arrival of Columbus. The primary currency in use under the Spanish consisted of small copper coins known as maravedis and the widely used Spanish pieces of eight silver coins, so called because they equaled eight Spanish reales.

The British Empire took over the island in 1655 and gave it the name Jamaica. British coinage became the island’s official currency, although Spanish coins continued in circulation until the Crown demonetized all of them except for gold doubloons in 1840. During that time, Jamaican currency consisted of farthings, halfpennies, pennies, three halfpence, threepence, sixpence, shillings, florins, half crowns, and crowns.

When the Bank of Jamaica created the Jamaican dollar, it decimalized the currency so that it could be subdivided into cents. The new dollar was distinguished from all other dollars in the former British West Indies by the fact that all the surrounding currencies mimicked either the US dollar or the Spanish real, while the Jamaican dollar was, in essence, a half-pound British sterling.

 

Jamaican Coins and Banknotes

The current issue of Jamaican coins – which are minted in combinations of nickel, steel, and copper – consists of denominations of 10 cents, 25 cents, one dollar, five dollars, 10 dollars, and 20 dollars. The one-cent and five-cent Jamaican coins are still in circulation but, after being demonetized by the central bank, are not legal tender. The 20-dollar coin, first minted in 2000, replaces a banknote.

The latest issue of Jamaican banknotes represents a transition. Previously, the country’s banknotes were, like that of many other countries, printed on cotton material. However, Jamaica’s tropical climate wears harshly on such banknotes, which means they have a relatively short lifespan, and it increases the cost of producing currency.

Therefore, the most recent issue of banknotes is being printed on an enhanced cotton substrate material that is varnished to provide a moisture-proof layer of protection. It also reduces the tendency of the banknotes to absorb microorganisms and other contaminants.

Banknotes come in denominations of J$50, J$100, J$500, J$1000, and J$5,000. Portraits of former prime ministers and other Jamaican historical figures adorn the obverse side of the bills, replacing the portrait of Queen Elizabeth that was on all the banknotes of the British West Indies and Eastern Caribbean dollars.

In addition to the regular banknotes, the Bank of Jamaica introduced a commemorative series of notes in 2012, celebrating the country’s 50 years of independence. The commemorative banknotes, which feature a “Jamaica 50” logo superimposed on the obverse side of each note, circulate alongside the regular currency.

Some in Jamaica’s Parliament criticized the introduction of the J$5,000 note in 2009, charging that producing the higher denomination banknote gave the impression that Jamaica’s currency was declining in value. In fact, the Jamaican dollar has indeed been steadily eroded by inflation, with the USD/JMD exchange rate climbing from 1 USD = 50 JMD in 2005 to 1 USD = 147 JMD in 2020. The Bank of Jamaica allows the Jamaican dollar to float in the foreign exchange market, but it is not a widely traded currency.

 

Learn More

CFI is the official provider of the global Commercial Banking & Credit Analyst (CBCA)™ program, designed to teach you all the knowledge and skills required to become a skilled credit analyst – including accounting, business analysis, financial analysis, loan security, and credit evaluation and review procedures.

The following CFI resources will be helpful in furthering your financial education and advancing your career:

  • Cayman Islands Dollar (KYD)
  • Floating Exchange Rate
  • Comorian Franc (KMF)
  • Top Banks in Jamaica

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