Sale of US dollar by dealers, fell to US$33.84 million at an average rate of $127.49 to the US dollar, at the close of trading, on Thursday, down from US$44.57 million at an average rate of $127.53 on Wednesday.
US currency purchases declined from the previous day to US$35.96 million on Thursday, at an average rate of $126.59 compared to Wednesday, with US$44.40 million at $126.63.
Dealers purchased US$46.14 million, versus US$58.58 million on Wednesday in all currencies in Jamaica’s forex market and sold US$43.23 million compared with US$56.55 million previously.
At Midday, dealers bought US$10.58 million at J$126.80 and sold US$5.35 million at J$127.43 compared to the buying of US$20 million at J$127.10 and selling of US$12.5 million at J$127.59 at the same time on Wednesday.
The selling rate for the Canadian dollar dropped to J$100.21 from J$102.37 at the close on Wednesday. The selling rate for the British Pound climbed to J$168.47 versus J$167.80 on Wednesday and the euro inched up in value against the Jamaican dollar, to J$151.76 to buy the European common currency, versus J$150.68 previously.
Jamaican $ makes modest gain – Thursday
Forex inflows well ahead of outflows – Wednesday
Dealers sold US$44.57 million at an average rate of $127.53 to the US dollar, at the close of trading, compared to US$39.74 million at $127.61 on Tuesday.
US currency purchases, amounted to US$44.40 million on Wednesday, at an average rate of $126.63 compared to Tuesday, with US$39.74 million at $126.95.
Dealers purchased US$58.58 million, versus US$54.45 million in all currencies into Jamaica’s forex market and sold US$56.55 million compared with US$56.20 million previously.
At Midday, dealers bought US$20 million at J$127.10 and sold US$12.5 million at J$127.59 compared to the buying of US$19.1 million at J$127.10 and selling of US$15.17 million at J$127.49 at the same time on Tuesday. In the Central Bank foreign exchange auction the weighted average rate of accepted bids of $127.34 as 44 bids amounting to US$25.7 million were entered for the US$10 million that was on offer.
The selling rate for the Canadian dollar rose to J$102.37 from J$101.86 at the close on Tuesday. The selling rate for the British Pound fell to J$167.80 versus J$168.30 on Tuesday and the euro inched up in value against the Jamaican dollar, to J$150.68 to buy the European common currency, versus J$150.16 previously.
BOJ cuts planned FX auction sale
Bank of Jamaica (BOJ) is cutting the amount it is committed to sell in its weekly foreign exchange auction B-FXITT, to US$29 million over the next four weeks.
The announced sale, is down from US$40 million that BOJ made available to Authorised Dealers and Cambios from the last Wednesday in September up to last week at US$10 million weekly. The amount to be sold this Wednesday will be US$10 million even as dealers have been selling off surplus foreign currencies, leading to an appreciation of the local currency since September. For the first two weeks of November US$7 million will be available, followed by US$5 million.
The amount to be sold is a fraction that the central bank will be buying from the system under the compulsory surrender requirement set by BOJ.
J$ gains but trading levels dip -Tuesday
Dealers sold US$39.74 million at an average rate of $127.57 to the US dollar, at the close of trading, compared to US$57.69 million at $127.61 on Monday.
US currency purchases, amounted to US$39.74 million on Tuesday, at an average rate of $126.65 compared to Monday, with US$76.03 million at $126.95.
Dealers purchased US$ 54.45 million, versus US$87.10 million in all currencies into Jamaica’s forex market and sold US$56.20 million compared with US$68.80 million previously.
At Midday, dealers bought US$19.1 million at J$127.10 and sold US$15.17 million at J$127.49 compared to the buying of US$37.8 million at J$127.24 and selling of US$28.57 million at J$127.64 at the same time on Monday.
The selling rate for the Canadian dollar rose to J$101.86 from J$101.44 at the close on Monday. The selling rate for the British Pound rose to J$168.30 versus J$166.91 on Monday and the euro dropped in value against the Jamaican dollar, to J$150.16 to buy the European common currency, versus J$150.37 previously.
Forex inflows jump to US$87m on Monday
The Jamaican dollar made more gains in foreign exchange trading on Monday, closing 17 cents better to purchase one US dollar than on Friday, on a day that saw inflows surge to US$87 million for all currencies.
Sales of all currencies into Jamaica’s forex market ended at US$68.80 million, from US$101.2 million, previously. On Friday dealers purchased US$44.14 million, well below the amount bought on Monday.
Dealers sold US$57.69 million at $127.61 at the close of trading up from US$39.51 million at $127.78 on Friday. US currency purchases, amounted to US$76.03 million on Monday, at an average rate of $126.95 compared to Friday, with US$31.08 million at $126.73.
At Midday, dealers bought US$37.8 million at J$127.24 and sold US$28.57 million at J$127.64 compared to the buying of US$13.37 million at J$127.31 and selling of US$11.37 million at J$127.74 at the same time on Friday.
The selling rate for the Canadian dollar fell to J$101.44 from J$101.70 at the close on Friday. The selling rate for the British Pound slipped to J$166.91 versus J$168.55 on Friday and the euro dropped in value against the Jamaican dollar, to J$150.37 to buy the European common currency, versus J$152.45 previously.
Ending FX surrender requirements
Jamaica’s Central Bank head quarters Downtown Kingston
The present arrangement where Bank of Jamaica requires foreign exchange dealers to surrender around 25 percent of their daily intake is to be phased out.
The central bank now considers the market deep and liquid enough for government entities to go directly into the market for their needs.
According to Bank of Jamaica, “the introduction of the buying side of B-FXITT will be synchronized with the gradual reduction of surrender and PSE requirements, and over time, these requirements will be terminated. This gradual transition will see more funds available in a more dynamic and transparent market.” Starting July 26, the central bank formally introduced an auction system for foreign exchange trading. The initial stage is the introduction of selling of funds to the market.
Bank of Jamaica (BOJ) currently purchases foreign exchange via three channels: regular surrender arrangements, the public sector entity (PSE) facility, and occasional direct purchases from individual financial institutions. The PSE facility in particular was considered a useful initiative to remove potentially distorting transactions from the foreign exchange market, but the central bank states that it is not flexible or synchronized enough to respond proportionately if a large entity experiences a sudden change in its foreign exchange needs. Also, while it began as a safeguard mechanism to protect a shallow and fragile market, the facility came with the price of a loss of transparency. Taking these and the surrender transactions out of the mainstream market means the market rate does not reflect the entire spectrum of foreign exchange transactions.
BOJ says that “with economic fundamentals improving and the foreign exchange market growing deeper, Jamaica is evolving towards a stage where the market is robust enough to handle these transactions without BOJ’s protection, and so these government agencies can freely settle their transactions in the market without causing disruptions. The market will therefore become more accurate and transparent by reflecting all major transactions, and daily rates will be a more accurate and credible reference of overall market activity.”
These pending changes mean that BOJ’s standard method of buying foreign exchange will become the what the central bank states is the “same efficient, market-friendly and transparent tool which it now uses to sell”. “BOJ says it “will retain the right to buy or sell foreign exchange outside of the standard B-FXITT schedule at any time if extraordinary conditions warrant, but will likely utilize a B-FXITT-type operation at those times instead of bilateral transactions, which will ensure that these transactions reflect current market conditions and are settled transparently at market-determined rates. BOJ’s avoidance of bilateral transactions will also benefit the market by encouraging dealers to trade more among themselves.”
Dealers sold C$76m on Friday
The Jamaican dollar made modest gains In the foreign exchange trading on Friday to close 3 cents better to purchase one US dollar than on Thursday on a day that saw C$76,397,101 being sold (US$60,805,327 equivalent) at J$101.70 versus J$102.76 on Thursday.
Dealers sold US$39.51 million at $127.78 at the close of trading up from US$33.81 million at $127.81 on Thursday. US currency purchases, amounted to just US$31.08 million on Friday, at an average rate of $126.73 compared to Thursday, with US$48.97 million at $127.99.
At Midday, dealers bought US$13,372,228 at J$127.31 and sold US$11,367,821 at J$127.74 compared to the selling rate of J$127.77 at midday on Thursday.
Inflows of all currencies into Jamaica’s forex market fell to US$44.14million, from US$58.03 million on Thursday while dealers sold US$101.2 million versus US$40.33 million, previously.
The selling rate for the British Pound rose to J$168.55 versus J$167.64 on Thursday and the euro rose in value against the Jamaican dollar, to J$152.45 to buy the European common currency, versus J$151.94 previously.
FX market nets US$18m – Thursday
In the foreign exchange trading on Thursday, dealers bought US$18 more than they sold as the selling rate slipped again, with it taking $127.81 to buy one US dollar.
Dealers sold US$33.81 million at $127.81 at the close of trading up from US$48.45 million at $127.90 on Wednesday. US currency purchases, amounted to US$48.97 million on Thursday, at an average rate of $126.99 compared to Wednesday, with US$45.61 million at $127.96.
At midday, the selling rate of the US dollar was J$127.77 with US$5,243,960 sold compared to $127.85, with US$12 million being sold, on Wednesday at midday.
Inflows of all currencies into Jamaica’s forex market rose to US$58.03 million, from US$54.05 million on Wednesday while dealers sold US$40.33 million versus US$55.19 million, previously.
The selling rate for the Canadian dollar rose to J$102.76 from J$102.59 at the close on Wednesday. The British Pound inched down to J$167.76 for buying the British currency versus J$168.24 on Wednesday and the euro rose in value against the Jamaican dollar, to J$151.94 to buy the European common currency, versus J$150.94 previously.
J$ stays below $128 to US$
The Jamaica dollar continued to trade below the $128 mark to buy one US dollar, in foreign exchange trading on Wednesday, for the second time since the close of 2016.
Dealers sold US$48.45 million at $127.90 at the close of trading up from US$46.05 on Tuesday at a rate of $127.97. US currency purchases, amounted to US$45.61 million on Wednesday, at an average rate of $126.96 compared to Tuesday with US$48.11 million at $127.01.
At Midday, the selling rate of the US dollar was $127.85, with US$12 million being sold, versus $127.78 on Tuesday midday with US$17.7 million being sold. In BOJ foreign exchange auction, 37 bids went after $10 million on offer, with bids totaling US$19.8 million, leading to the average rate falling to $127.75. The highest bid was $128.05 to buy $1 million and the lowest $125.05, to buy US$800,000.
Inflows of all currencies into Jamaica’s forex market fell to US$54.05 million, from US$58.13 million on Tuesday while dealers sold US$55.19 million versus US$52.98 million, previously.
The selling rate for the Canadian dollar fell to J$102.59 from J$103.78 at the close on Tuesday. The British Pound inched down to J$168.24 for buying the British currency versus J$168.87 on Tuesday and the euro rose in value against the Jamaican dollar, to J$150.94 to buy the European common currency, versus J$151.61 previously.
J$ drops below $128 to US$
The Jamaica dollar slipped below $128 to purchase one US dollar in foreign exchange trading on Tuesday for the first time since 2016.
At Midday, the selling rate of the US dollar dipped as low as $127.78, with US$17.7 million being sold but clawed its way to $127.97 at the close of trading after dealers sold US$46.05 million, up from US$43.84 on Friday at a $128.22. US currency purchases, accounted for US$48.11 million on Tuesday at an average rate of $127.01 compared to Friday at US$33.81 million at $127.23.
Inflows of all currencies into Jamaica’s forex market fell to US$58.13 million on Tuesday, from US$48.73 million on Friday while Dealers sold US$52.98 million versus US$56.08 million, previously.
The selling rate for the Canadian dollar fell to J$102.78 from J$103.15 at the close on Friday. The British Pound inched up to J$168.87 for buying the British currency versus J$168.83 on Friday and the euro rose in value against the Jamaican dollar, to J$151.61 to buy the European common currency, versus J$150.87 previously.