BOJ sold US$30m to FX market on Friday

BOJ interest cuts overnight rate.

Bank of Jamaica (BOJ) intervened in the foreign exchange market on Friday, October 18, the first time since July by selling US$30 million at a weighted average rate of $138.87 by means of a flash intervention.
Bank of Jamaica introduced a bidding system when they intervene in the foreign exchange market officially called “Foreign Exchange Intervention and Trading Tool (BFXITT).” The system was introduced in 2017 with the central bank buying and selling funds in the market whereby authorized dealers and Cambios had bid for the amounts on offer.
Friday’s intervention was to address temporary demand and supply imbalances in the market Jamaica’s central bank stated. Friday’s intervention is the first being made since the central bank intervened with two flash sales on July 18 and 19th this year with a total sale of US$35 million and prior to, US$30 million on July 11. In 2017 and 2018 the central bank had regular weekly scheduled interventions in the market from August to October and November, but there has been none in 2019 after BOJ lowered the amount dealers had to surrender to the central bank from amounts they bought weekly.
The amount offered for sale on Friday attracted 42 bids amounting to US$72.6 million but just 17 were accepted with the highest bid at $139.15 and the lowest at $137. Bids at $138.65 got 33.33 percent of the amount applied for.
The intervention comes against the background of the country’s Net International Reserves climbing US$162 million, from US$2.936 billion at the end of August to US$ 3.098 billion at the end of September.

J$ gains moderate Jamaica’s inflation

Jamaica’s inflation rate eased 0.4 percent in September 2019 according to the All Jamaica Consumer Price Index recently released by the Statistical Institute of Jamaica (STATIN) as the Jamaican dollar appreciated from a low of J$138.1 to the US dollar well into late August.
The rise in the value of the Jamaica dollar in the above period would reduce prices downwards for imported items but mainly fuel that would lead to reduced gasoline prices airfares and electricity that have a major impact on inflation.
The rate is down from 0.8 percent in August and 1 percent in July but higher than the negative 0.1 percent in June. For the twelve months to September, inflation came out at 3.4 percent.
According to Statin, the movement for September “was mainly as a result of a 0.5 percent increase in the index for the heavily weighted division Food and Non-Alcoholic Beverages. Fluctuating prices in agricultural produce had a strong influence on the movement in the index for the class ‘Vegetables and Starchy Foods’ moving up by 1.3 percent.

Chart showing the effect of movement of the J$ & local inflation.

Other notable increases occurred for the following divisions: ‘Communication’ 6.9 percent resulting from higher price for communicative services, ‘Education’ 4.7 percent due to higher tuition fees for the new school year. ‘Recreation and Culture’ also increased by 1.7 percent from higher prices for textbooks. Additionally, the ‘Housing, Water, Electricity, Gas and Other Fuels’ division recorded a 0.3 percent increase, due primarily to higher electricity, water and sewage rates.” The overall increase in the inflation rate was tempered by a 1.0 percent fall in the index for the Transport division attributed to lower petrol prices and airfares. Notwithstanding the impact of the reasons for changes mentioned by Statin, a closer look at the movements of inflation and the exchange rate of the Jamaican dollar versus the US dollar shows the movement of the exchange rate having the most telling effect on inflation, as is shown by the chart of inflation and exchange movements.

US$20m pumped into Jamaica’s forex market

Jamaica’s Central Bank is offered US$20M for sale in FX market on monday.

Jamaica’s central bank, Bank of Jamaica pumped US$20 million into the country’s foreign exchange market today, in what they call a flash intervention.
The intervention, not previously announced, comes against the background of the exchange rate for the US dollar closing on Friday at $129.41, up from $128.19 on Thursday, with selling by dealers, amounting to US$25.3 million on Friday. It also takes place with a US$77 million build up in Net International Reserves at the end of March, to US$3.085 billion from US$3,007 at the end of February.
The flash offer resulted in 39 bids amounting to $45.65 billion that came in for the amount auctioned. Just 15 bids were accepted, with rates ranging from $130.25 to $131.80. The average clearing rate was $130.85.

How the east was won?

Add your HTML code here...

Annmarie Vaz winner of the East Portland seat.

Anne Marie Vaz increased her party’s support by a stunning 58 percent, over the JLP’s haul in the 2016 General Election to win the East Portland by-election on Thursday with just 11 votes less than 10,000.
At the same time, Damion Crawford only pulled out 5 percent more votes than was polled for the PNP, in 2016. The story gets increasing bad for the PNP and it is not just in this election. The writing was on the wall for years but poor candidature, by the JLP lent the view to many onlookers, that East Portland was safe PNP territory. The 2007, results with the PNP winning by less than 800 votes, should have sent a clear warning to them that things were changing rapidly.
In this latest election, the number of new voters on the list, grew by 5.6 percent, but Crawford’s increase of 4.8 percent was less than the rise in registered voters. Looked at differently, he picked up just 354 votes more than in the 2011 elections or only 3.8 percent more. On a net basis, he garnered only approximately 25 percent of new voters, while Vaz got 75 percent. This is consistent with a pattern seen island wide since 1993 and is one that is not likely to change, anytime soon.
The Labour party was able to get out their 8,000 voters of 2011 and add 24 percent more voters to it, in addition to commandeering the vast majority of new voters, the vote tally at the end of the preliminary count suggests.
The results on the surface is a major about turn for the seat. Closer examination of the numbers for a longer period tells a clear tale. The huge 2019 increase is due to a below performance for the JLP in the 2016 elections, when the votes by the party sank by a hefty 22 percent and  well against the national trend. The trend since the 1993 elections, suggests that the natural growth in party support should have seen them polling over 9,700 votes, just below the numbers she got in the latest polls.
The data also points out that the trend is indicating that the JLP should have polled around 2,000 more votes than they did, this time around.  Those voters are there in their corner based on the growth in support, reflected in the average gains in votes cast in prior elections. This bit of information is also reflected in public opinion voting survey data.

Jamaican dollar makes more gains

NCB had the highest net sale of US$ on Friday

The rate of exchange for the United States and Jamaican dollar inched further in favour of the local currency on Friday as dealers sold US$42.2 million at an average rate of $127.99 on Friday, down from an average of 128.126 with the sale of $67 million on Thursday.
On Friday, dealers bought US$37.38 million at an average of $126.74, a decline from $127.38 with the buying of US$61 million on Thursday.
Dealers bought $45,56 million in all currencies on Friday and sold US$50.28 million compared to purchases of US$77.6 million and sale of US$82.5 million on Thursday. Thursday’s trading includes the buying of Can$19.7 million and sale of Can$19.4 million.
Major net sellers of US dollars on Thursday are, Citibank with the purchase of US$160,000 and sale of US$1.65 million, First Global Bank buying US$271,000 and selling US$1.96 million. JMMB Bank ended with the buying of US$839,000 and selling $3.6 million, JN Bank purchased $868,000 and sold $2.48 million, Victoria Mutual Building Society bought $720,000 and sold of $2.45 million but First Caribbean purchased $5.6 million and sold just $1.38 million.
On Friday, Bank of Nova Scotia purchased $9.2 million and sold just $5 million, First Caribbean Bank bought US$813,000 and sold US$1.3 million, JMMB Bank ended buying US$1.87 million and sold $4.8 million, JN Bank purchased $1.16 million with sales of $1.87 million. National Commercial bought US$3.56 million and sold $8.5 million, Sagicor Bank bought $852,000 while selling US$1.99, Victoria Mutual Building Society purchased $693,000 and sold $1.3 million but Citibank purchased US$1.7 million and sold just US$587,000.

J$ revaluation leads to more US$ selloff

On Tuesday dealers purchased US$39.6 million from the public at $127.50 and sold $44.86 million at an average of $128.63 down from $128.93 on Monday.
On Monday, Bank of Nova Scotia bought US$14.27 million and sold $11.68 million on Monday and on Tuesday bought US$5.6 million and sold $10.1 million while National Commercial Bank bought US$8.66 million and sold US$18.95 million on Monday and on Tuesday bought $4.1 million and sold $9.5 million. Sagicor Bank bought US$1.96 million but sold $9.92 million on Monday and on Tuesday purchased $787,000 and sold $1.89 million. JN Bank sold $6 million on Tuesday having bought just $1.6 million and Victoria Mutual Building Society bought US$3.1 million and sold just $347,000.
In foreign exchange trading, dealers in total bought US$56.13 million and sold $73.36 million, representing a net sale of US$17 million on Monday. Purchases of all currencies on Monday amounted to US$60.64 million and selling of $76.95 million and on Tuesday, purchases of all currencies amounted to US$45.44 million and selling of $59.3 million. Including in the trade was the purchase of can$4.68 million and sale of Can$17.16 million.
The sell off of US dollar is unlikely to be coming from stock piling of foreign currency and may be coming from banks selling the currency short hoping to buy back at a lower price in the winter months when the supply is expected to be higher. The financial institutions are also earners of foreign exchange from loans, bonds and fees on foreign currency accounts and would have some of these to sell.

Some banks offloading US dollars

National Commercial Bank sold off US$ on Thursday.

The Jamaican dollar closed below the J$130 to the US dollar on Thursday, with the selling rate to buyers ending at an average of $129.62. The rate fell as National Commercial Bank bought just US$6.2 million and sold $14.8 million while JN Bank offloaded US$5.3 million while buying a mere $190,000.
On Wednesday, Scotiabank offloaded nearly US$23 million against buying $13.6 million. For the week to date, dealers bought US$182 million and sold US$204 million. In the previous full week, purchases amounted to $192 million and selling $188 million. With one more day of trading to come for this week, inflows will be well ahead of last weeks’ level which included purchases of US$10 from Bank of Jamaica (BOJ). No sale of foreign exchange was done by the central bank this week, and none are planned for the next four weeks. BOJ sold US$19 million to the market up to November 15 last year.
For the current week dealers also bought 5.9 million of Pound sterling and sold 3.4 million and purchased $21.2 million Canadian dollars and sold $18.9 million.
In 2017, for the first four days of the fourth week of October, purchases of all dealers and Cambios amounted to $196 million which including purchases from BOJ of US$10 million with sales of US$179 million.

More gains for Jamaican dollar

The Jamaican dollar gained almost one percent in value for the past week, with the selling rate ending the week at J$132.55 to one US dollar, an improvement over the J$133.80 it was sold for at the close of the previous week.
The local currency closed on Thursday with the selling rate at $133 and buying at $131.77, on Friday the buying rate closed at $131.33 or 44 cents less than on Thursday.
Unlike the previous week when dealers bought $48.8 million in US currency and the equivalent of US$56.6 million in all currencies and sold $46 million in US currency and US$53.2 million in all currencies, this past Friday only US$32 million was purchased in United States dollars and US$34.8 million in all currencies with US$43.74 million sold in US dollars with a total of US$44.67 million of all currencies.
On Wednesday coming, Bank of Jamaica will have it last scheduled sale for October when it auctions off US$10 million to the market that could lead to further revaluation of the local dollar.

Jamaican dollar makes strong gains

The Jamaican dollar recovered the losses suffered at the close of trading on Wednesday as the selling rate closed on Thursday at $133 to US$1 as dealers sold US$40.57 million, down from $133.55 on Wednesday as US$42.75 million was sold.
Dealers bought just US$30.3 million on Thursday at an average of $131.77, down from $132.26 in purchasing US$45 million. Total foreign exchange traded on Thursday amounted to US$38 million being bought by dealers and sales of US$47.9 million. the amount purchased by dealers on Wednesday was boosted by sale of US$10 sold by Bank of Jamaica through their B-FXITT weekly auction.

BOJ FX auction rate drops $1 to $132.75

The average rate for the sale of the US$10 auction sale by Bank of Jamaica in its regular B-FXITT Standard Intervention on Wednesday, fell by $1 to $132.74 this week from $133.75, in the previous week’s auction.
The central bank offered US$10 million to eligible bidders that attracted 31 bids amounting to $21.5 million, 17 bids were accepted and resulted in an average rate of $132.74. the out turn suggest that rates in the spot market for foreign exchange could decline in the next series of trading.
Interestingly, the highest bid was priced at $133.90 and the lowest at $130.83. The lowest bid that was successful was at $132.30 and received just 16.3 percent of the amount applied for.
The final scheduled auction for October will be on the 17th when US$10 million will be auctioned.
In trading on the foreign exchange market on Tuesday, dealers bought $46.28 million in US dollar currency at an average of $132.39, slightly below the rate in today’s auction. Dealers sold US$46.94 million at an average rate of $133.34 overall, trading of all currency amounted to just over $55.3 million for both selling and buying. In trading on Monday, US dollars purchase amounted to just US$20 million at an average rate of $131.11 and sale of US$34 million at $133.99.
On Monday overall, trading of all currencies, amounted to just over $25 million and US$36.74 million, buying and selling respectively.