Jamaica Likely to Lose Close to $2.5 Billion After Betting On Oil Prices
The Jamaican government could very well lose close to $2.5 billion or the equivalent of USD$ 20 million after taking a gamble on oil prices last year.
According to Nationwide, the government had hedged the money, in an attempt to lock in oil prices at USD$66 a barrel for 15 months if prices rose above that level.
However since then oil prices have taken a sharp dive, reaching below USD$30 a barrel.
When the government bought the insurance policy from Citibank six months ago, Senior Deputy Governor at the Bank of Jamaica, John Robinson, said it was an attempt to protect the country from oil prices rising higher than $66 a barrel.
At the time the bet was made, oil prices were at approximately $63.
There’s still a possibility oil prices will go back up in time for the government to recoup its investment, but the general consensus is that is unlikely.
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