Bank of Jamaica (BOJ) scheduled B-Fxitt auction last week saw 43 bids seeking to purchase US$39.9 million but only $15 million was on offer, leaving a large amount of unsatisfied demand.
Only 17 bids succeeded in getting a portion of the funds offered for sale, but then not every bid really wanted the funds. The bids left the average rate at $138.19, with $137.90 being the lowest rate that succeeded. The lowest fully successful bid was $137.97 for US$1 million. The lowest bid received was $131.10 to purchase US$1.5 million.
On Friday, BOJ offered US$40 million in what they called a flash intervention tool. On Friday August 31, last year BOJ also had a flash intervention sales that pushed the amount of buying in the foreign exchange market on that day to US$76 million. BOJ sold US$5m on the Wednesday of that week.
The flash intervention this past week, was clearly to satisfy the unmet demand from Wednesday’s auction, 42 bids were presented amounting to US$76.9 million leaving U$26.9 million of unmet demand. The average rate declined to $137.49, with the lowest accepted bid price being $136.65 and the highest being $138.70. The lowest bid that was fully allocated was US$8 million at $137.00. Bids came in as low as $129. The lowest bid that had some success was $136.65, and this compares with $137.90 on Wednesday, suggesting that those bids that did not succeed included a large amount of low bids made to satisfy the requirement that all dealers must put in a bid. On Wednesday, this week
BOJ sold US$65M into the FX market last week.
BOJ will be carrying out their usual auction at which US$15 million will be made available, to be followed by US$10 million each, on September 5 and 12.
On Thursday, dealers bought US$33.9 million at $136.37 and sold US$35.3 at $137.96, up from a rate of $137.48 on Wednesday. On Friday, US$73.2 million was purchased by dealers at $136.75 and they sold US$46.2 million at $137.90. On Monday dealers bought US$45.5 million at $136 and sold US$50.3 million at $137.52, a fall from Friday’s Average rate.
