10 Cents – Jamaica

In 1995, Jamaica's currency situation was defined by a protracted and severe foreign exchange crisis, a direct consequence of the financial sector meltdown that had begun earlier in the decade. The collapse of numerous banks and insurance companies, burdened by bad debts and mismanagement, forced the government into a costly bailout program. This dramatically increased public debt and shattered investor confidence, leading to massive capital flight and a critical shortage of US dollars. The scarcity of foreign exchange severely hampered the country's ability to pay for essential imports like fuel, food, and raw materials, creating widespread economic strain.

The government, under Prime Minister P.J. Patterson, responded by maintaining a managed floating exchange rate regime but was forced to devalue the Jamaican dollar significantly. In an effort to stabilize the situation and satisfy conditions for International Monetary Fund (IMF) support, the Bank of Jamaica intervened heavily in the market while also raising interest rates to astronomical levels to attract foreign capital and curb inflation. These high interest rates, however, stifled local business growth and increased the cost of servicing the already massive public debt, creating a painful cycle of austerity and economic contraction for the average Jamaican.

By the end of 1995, the currency remained under intense pressure, with the Jamaican dollar depreciating sharply against the US dollar throughout the year. The crisis underscored deep structural weaknesses in the economy, including a heavy reliance on imports and chronic trade deficits. The financial upheaval of this period set the stage for the subsequent formalization of a full floating exchange rate system in the following years, as the government continued to grapple with restoring macroeconomic stability and rebuilding foreign reserves under strict IMF supervision.