in the december 2009 and march 2010 quarters. financial markets the pace of appreciation of the exchange rate accelerated in the june quarter relative to the previous quarter. for the review period, the weighted average selling rate appreciated by 4. 1 per cent, continuing the appreciating trend that was observed in the second half of the march quarter. this was the sharpest quarterly appreciation since the june quarter of 1996. the strongest appreciation occurred in june when the exchange rate strengthened by 2. 9 per cent, or j $ 2. 46, influenced largely by increased investor preference for jamaica dollar assets. the preference for jamaica dollar assets was reflected in increased net private capital inflows the impact of which more than offset the demand for resources to meet current transactions. in an effort to smooth the pace of movement in the exchange rate, the bank purchased approximately us $ 54. 0 million net from the market during the quarter. this contributed to an nir stock at end - june of us $ 1 795. 8 million, which was not only higher than the stock at end - march but was also above the end - june target. at end - june 2010 the bank ’ s gross reserves amounted to us $ 2 526. 7 million, representing 19. 7 weeks of projected goods and services imports, relative to the international benchmark of 12 weeks. market - determined interest rates declined over the period in parallel with the appreciation of the value of the domestic currency during the quarter. the average yield on the benchmark 180 - day treasury bill fell by 123 basis points to 9. 26 per cent while the yield on the 90 - day instrument fell by 166 basis points to 8. 52 per cent. it went further at the july auction when the 180 - day treasury bill yield also fell below 9. 00 per cent. average yields on government of jamaica global bonds also continued to decline during the review quarter. concurrent with the lower yields, there was continued narrowing in the spreads between government of jamaica global bonds and emerging market bonds and us treasuries, respectively. private money market rates also reflected this declining trend. inflation headline inflation fell to 2. 6 per cent for the june 2010 quarter, close to the lower bound of the forecast range of 2. 5 per cent to 3. 5 per cent that i announced at the last press briefing. the decline in inflation occurred in spite of the significant impact of the increase in bus fares in april. because of the increase in bus fares, transportation accounted for 81. 2

associated with jamaica not having a credit bureau or credit registry. well, jamaica is now at an advanced stage in setting up a credit reporting system so there are good reasons to believe that by the time the next report is released the existence of the new system will contribute to an improvement in our ranking and that you will all see a difference through its impact on your businesses. in line with international best practices, jamaica enacted legislation in august 2010 in order to facilitate the sharing of credit information. the credit reporting act, which came into effect on 1 october 2010, provides the legal framework for a credit reporting regime in jamaica and is designed to improve credit assessment processes and facilitate enhanced risk management and loan pricing strategies throughout the financial sector. the act prescribes or specifies such matters as : – licensing of persons who wish to offer credit reporting services ; – eligible credit information providers ; – the nature of credit information ; – the use of credit information ; – persons who can request a credit report ; – access by customers to their own credit information ; – the handling of customer complaints ; and – supervisory oversight by the regulatory authority, that is, bank of jamaica. on 2 november 2010, the credit reporting regulations were affirmed by the house of representatives and, a few days later, the senate began its deliberations on the matter. the regulations prescribe such operational matters as the licence application process, forms and fees. the bank of jamaica having been designated as the supervisor of credit bureaus is now preparing to take up its oversight responsibilities. this includes : 1. public education to make consumers aware of the objectives and benefits of credit reporting and the mechanics of the regime. this involves : – media features ( during february 2010, the bank published an item under its “ central banking 101 feature ” titled “ credit bureau explained ” as part of public sensitisation exercises ) ; – pamphlets with “ frequently asked questions ” ( faqs ) – which will shortly be made available ; and – a dedicated webpage on the bank of jamaica website, once official copies of the act and the regulations are made available to the bank for posting on the site along with a set of frequently asked questions and other useful information ( such as the procedures for filing complaints about how your credit information has been handled ). the bank also published a helpful article on “ credit bureaus and the efficiency of credit markets ” in its latest quarterly monetary policy report released on 10 november 2010. 2. licensing the bank will be taking similar approaches and using similar methodologies