Public meeting to discuss remittance issues
(CNS): The Jamaican Consulate is hosting a public meeting next week to discuss the issues surrounding money transfer businesses, which many people use to send remittances home to their native countries. Those businesses have recently begun to only accept US dollars, which is driving up exchange rates and fees and some banks are now limiting exchange amounts, creating a shortage of US currency.
With a significant Jamaican population in the Cayman Islands, Honorary Vice-Consul Elaine Harris said the Jamaican Consulate has been receiving many complaints and concerns on the matter. However, the public meeting, which will be at the Town Hall in George Town next Tuesday, will be open to all nationalities, not just Jamaicans.
Harris said that there was a great deal of mis-information circulating and the Consulate was trying to get everyone together to get clarification on some of the issues. There will also be a Q&A session and representatives from the Cayman Financial Services Ministry and JN Money Transfer will be on hand to answer questions, she said.
US dollar shortage driving up cash costs
Cash transfer firms stay open using US currency
Harris said she hopes people will come out to discuss their concerns — and not just expats, since this particular issue has a ripple affect across the community. However, she stressed that the purpose of the meeting is information sharing, not to blame the institutions or to bash the Cayman government.
Tuesday’s meeting will focus specifically on the remittance issue, Harris told CNS. There are other concerns affecting Jamaicans and other expatriates here in the Cayman Islands, such as health insurance and labour issues, and the Consulate is planning to have another meeting at a later date to deal with those, she said.
The Jamaican Consulate meeting to discuss issues surrounding the Money Remittance Services will take place at the George Town, Town Hall on Tuesday 29 September at 6:30pm.
Category: Community, Local News
If US cash is being shipped off island, how is it transported? Private charter planes? Private couriers on commercial flights? Doesn’t this pose a security risk for a major heist?
Lets school these people. In fact, lets make it rain! CIG more precisely the Monetary Authority holds US Treasury certificates to back the Cayman Currency whereby it holds US treasury notes (US Gov’t Debt) US 1.25 cents of debt to every CI $1 in circulation. Now, with all the US currency printing (since 2009) and the need to stash cash the world is awash in US dollars and this has caused the price of US government debt to go up and interest rates to go down.
If you look on the CIMA website it is likely (haven’t checked in a while) that Monetary Authority actual value of US debt held is worth about 1.35 cents for every Cayman Dollar and they are receiving very little interest if any (same goes for your bank account). Now, right now, would be the ideal time to sell the excess US Debt held and bring it back to Cayman and open the currency window to the local banks to purchase this extra say USD 10million to USD 12 million in exchange for CI dollars at the normal going rate
This is the short term fix…the long term fix is as below
Now, if we were really interested in seeing every person in Cayman get a slight raise we use the extra CI collect and peg the CI dollar higher against the USD say at 1.30. The folks that wish to use the old fashion method of Western Union/ MoneyGram could go then stand up in line and pay the extra costs to have USD available to non commerical customers and lose the little extra in currency cost and the CIG should tax this type of transfer more heavily so as to dissuade the reputation and regulatory risks associated with these sorts of businesses. With the extra funds earmarked to fund financial crime taskforce or additional courts to prosecute money launders and criminals. There would be minimal increase costs to tourism and all retail businesses should be forced to decrease their prices in line with the currency repeg. Many USD will flow back to the Monetary Authority when the repeg is announced as USD account holders transfer their USD back to CI dollars.
Win Win
I was about to ask why a mind like yours isn’t teaching Economics at UCCI, but you surely belong to a more sophisticated audience that could only be found at Harvard, Yale, Oxford, Cambridge, La Sorbonne etc.
The postet made some sound points indeed backing assets surpass currency in circulation by about CI 8 million at this very moment. As free.market capitalism would suggest the CI dollar is indeed worth more than 1.2 US and is worth about1.32 thus the peg is artifical and yet another faucet of deception is at hand. Too, increase in currency would bring with it an increase in confidence so badly needed . However, it would be a bit tricky to execute as non physical money I.e pension balances would need to be decreased as the underlying USD.denomited investment would be effected. a sounf plan all the same
Maybe I need to look into the business of being a personal money transfer courier.
something just isn’t right as usual if I bring us cash to the money transfer place they send an electronic payment form to the receiver not the actual $ so the $ the physical stuff hasn’t gone anywhere so whats the problem? turn in some more ci funny money get some real US$ send it out again and again Am I supposed to believe the physical money goes somewhere? perhaps they move it out to some place like the turtle farm sturr it for a few days and then send it back to the local banks this is the only thing I can imagine is happening to cause a short supply
OR is it that people are turning in the CI funny money and hoarding US$ under there beds
that I can see is actually happening
What’s happening is people are sending US cash back home since the remittance services are no longer doing it. So the physical cash in Cayman is being depleted. It’s not like Cayman exports much.
8.01 am,
The issue is the Remittance Companies are no longer able to deposit (as their accounts were closed) the funds they accepted (to transfer on behalf of their clients) in a local bank for them to be able to do wire transfers to settle with their counterpart in Jamaica/Philippines who are paying the funds to the recipients’ in that country.
In light of this they switched to accepting only USD Cash which they were then shipping to the USA or Jamaica/Philippines to settle for the payments that were being made on their behalf. Therefore this exercise reduced the available USD cash on the island. It also created a situation wherein a black market arose as a result of the shortage, thus opportunities were taken to increase the exchange rates outside the banking system.
The money transfer firms aren’t banked in Cayman anymore, so all the US cash being handed over by their customers, that used to be deposited here, along with the KYD, is now being stuffed into a suitcase and flown out of here, I think to the US, where it is banked and hence why they will only accept USD. US banks wouldn’t know what to do with KYD cash hence the switch to USD only. Hope that makes sense.
What do foreign banks charge for ATM withdrawals? A couple dollars a transaction, right? Can’t these guys open a bank account, send a debit card home and let their family withdraw cash at that end?
The whole crux of the matter is that they do NOT have bank accounts, and because of Know Your Customer (KYC) rules no bank will open an account for most of them.
Why not? Surely they can provide passports, utility bills, employer letters and the other usual KYC documents
It would help siphon off the illegal workers but we know they don’t really want that. I want to know what is so hard in opening a bank account. All it takes is working legally in the country. I did letters for my father’s helper as well as my helper so they both have bank accounts.It’s only the illegal non-contributing members of society that have a problem with this.
Public information message: I will be setting up a stall at the Strand shopping centre on Saturday, all those wishing to send cash anywhere please bring it to me and I will personally deliver it to every single address for just the tiniest smidgen of a fee! Seriously, I am a really good guy, totally to be trusted. In fact you can trust me as much as you can CIG! And RCIPS! Honestly!
Am I trying too hard?
….. will be open to all nationalities, not just Jamaicans.
CNS probably means “not just Jamaican”. Like Jamaican nationality.
Pedant….
Just hire more Caymanians
I would like to but they do not want to work in any job that requires physical labour and if you do hire them, they work maybe 4 days a week and call in sick or if you leave them at a work site, when you go to check on them, they’ve gone with their friends and expect you to pay them for their absence. I have ben burned so often by useless Caymanians (and I offer good money), I go through the motions now and then get real workers from other countries who understand that to earn a wage you actually have to work for it.
Remember what happened when the car wash in Red Bay and Godfrey Nixon decided to get rid of their Filipino workers and replaced them with Caymanians?
They both had to shut down a short time after.
So the world’s fifth largest financial centre (according to CIMA), with banks holding deposits of trillions of US dollars (according to CIMA), does not have sufficient US cash on hand meet the payroll needs of around 15,000 labourers?
Can someone let the US Justice Department/IRS/FBI/President Obama know at once that the whole thing is a marketing myth?
A physical cash shortage is quite different from ledgered money via US Dollar custodians in New York. Even NYC banks can’t satisfy physical cash demands of any great size without an appointment and an armored car. The problem is that the day laborer, moonlighting as a laundering smurf, does not want to conduct a traceable transaction via a legitimate bank account in their name. Otherwise, they would simply open an honest bank account, buy Jamaican Dollars or Philippine Pesos, and send that without any physical cash necessary. Drug transshipment requires physical cash, ergo these services are (finally) being shut down.
Unfortunately, the domestics and laborers who need this service can’t afford to open up bank accounts. Have you see the fees that the banks charge now? These people can barely scrape by with enough money to survive here. They can’t afford to have a bank charge them a monthly fee as well.
You mean like 5 bucks! How about employers work with their bank to get accounts for all their staff that might need them. It is 2015 cash is on the way out.
According to CIMA those payroll needs amount to $180mio per year in outgoing funds, imagine a small town in the US of 50,000 people with a bank handing out $180mio USD a year, and you get the picture. Now assume that bank was on the Mexican border and the $180mio wasn’t in USD, but Mexican peso’s…
So if our permit holders from Jamaica are sending back more than 100 million dollars annually I am just wondering…
In Jamaica when they convert the CI or US dollars to Jamaican dollars – do the recipients have to use wheelbarrows to take the money home from the money transfer locations?…
Has anyone looked at using the same method that was used by National Bulk Carriers in getting our seamen remittances home. These amounts were agreed on by the employees and was deducted by National Bulk (employer) and remitted to the Govt. Savings Bank. Employees/Employers here could do the same and have funds sent directly to the remittance Companies for processing.
This would provide some comfort to the Banks as due diligence could be sought on the Employers and in turn to the Correspondent Banks to belay their fears/exposure to money laundering and terrorism funding.
Sorry, the 3rd world governments involved are neither sufficiently efficient nor trustworthy for such a meticulous exercise.
Yaad nah tek de Bitcoin awah?