Given the instability which continues to characterize the international financial markets, the need for coordinated actions from local decision makers is greater now than in almost any other period of our recent history.

For this reason, the Opposition feels obliged to comment on what seems to be a clear absence of coordination from the two institutions with responsibility for defining interest rates policy.

The Ministry of Finance recently issued a 15 month instrument at a 16.7% interest rate.  Even before this issue was closed, the BOJ announced that the interest rate on its 365-day instrument has been increased from 15.5% to 16.7%, the same as that on the Ministry of Finance's 15-month paper.  The natural inclination of the market is to go for the shorter-term paper, as the sharp increase (1.2 percentage points) on the BOJ 365-day instrument will be interpreted as a clear signal that further increases are likely.

The Opposition urges that, in addition to its monitoring functions, ensuring an increased level of coordination must be a priority of the Task Force which the Prime Minister has recently announced.

Omar Davies, MP
Opposition Spokesperson on Finance & Planning.
(876) 978-1337