FX Market — Page 5

BOJ resets FX market

September 2, 2020 by IC Insider.com

Massive speculation in the US dollar in Jamaica since March this year, maybe ending with the latest move by Bank of Jamaica exposing the extent of the market’s acceptance of rates above J$150 to one US dollar, currently and effecting some revaluation of the local dollar.
Bank of Jamaica placed on sale through their B-FXITT Flash sale mechanism, US$20 million on Tuesday, with the results suggesting exhaustion of the speculative bubble. The sale was the first on record when the demand was less than the amount offered by the central bank since they started this method of intervention three years ago.
At the latest auction, only ten eligible bids amounting to a mere $7.8 million went after the amount offered. The Central bank accepted only five Bids for $6 million at $146.81 to the US dollar. The highest accepted bid was for US$2 million at a rate of US$148.30 to one US dollar. The move spilled over into the daily exchange market, with the average rate declining. Dealers bought US$55 million at an average rate of $147.545 to one US dollar and sold $53.85 million at J$148.6516 to the US. On Monday. Dealers bought US$42.68 million at an average of J$147.3109 and sold US$57.28 million at J$149.2881 each.

Jamaica’s Central Bank sold only US$6M in its FX flash auction on Tuesday.

Trading on Friday last saw buying by dealers of US$40.5 million at $148.3155 and selling of US$28.9 million at J$149.5907 each.
In August, Bank of Jamaica sold US$30 million to Authorized Dealers and select Cambios on Tuesday 18, through a B-FXITT Flash Auction that saw US$36.4 million demanded. Bank of Nova Scotia, First Caribbean International Bank, bought US$6 million, each and JMMB Securities with US$4.45 million, were the largest takers, buying between them. NCB Group was notably absent from the buyers in the August sale when the average rate was J$150.64 to the US.

Filed Under: Breaking News, Feature Stories, FX Market Tagged With: BOJ, B‐FXITT, Daily Trading, Emerging markets, fx, Grace Kennedy

Halting bank dividends to cut US$ demand

April 27, 2020 by IC Insider.com

Investors in Jamaica will be hit hard by the Bank of Jamaica (BOJ) decision to halt the payment of dividends for 2020 by financial holding companies and deposit-taking institutions.

Shareholders at and banking groups will be hit hard by the BOJ decision to stop dividend payments for 2020.

Several Jamaicans who rely on dividends from financial institutions will find that their income will be slashed from a source they have come to rely on for decades and especially now that there are few other investments that can provide the same level of return with interest rates in the country so low currently.
According to Jamaica’s central bank, the decision is done ”with a view to conserving capital and further enhancing licensees’ lending and loss-absorption capacities.” “Bank of Jamaica, after consultation with the boards of financial holding companies (“FHC”) designates, wishes to confirm the mutual understanding that FHC designates and deposit-taking institutions (“DTI”) will suspend the distribution of profits by way of declaring dividends in any manner (cash or stock) for the 2020 financial year, until further notice. It is also our understanding that FHC designates and DTIs will similarly postpone the distribution of any unpaid dividends declared for the 2019 financial year.
What does this all mean? Sagicor Group declared a dividend of forty cents per share payable on May 6, 2020, to shareholders on record on April 24. With this latest development, this dividend cannot be paid out in 2020 or until the central bank lifts the restrictions.
The move, although not stated, is much more a foreign exchange control measure in disguise to halt the payments of dividends in US dollars to the majority shareholders who are overseas. The move will result in more than US$50 million not leaving the country for the rest of the year.
Scotia Group, Sagicor Group and NCB Financial Group are three of the country’s largest entities with deposit-taking subsidiaries. All three have large overseas majority shareholders with Scotia Group overseas holding at 73 percent. While the release is silent on is the matter of conserving foreign exchange.

Filed Under: Company News, Dividends, FX Market

Sharp rise in Jamaican$ value

December 19, 2019 by IC Insider.com

NCB purchased US$32m and sold US$73m at J$130.16 on Thursday & drag the US$ down vs the J$.

The Jamaican dollar enjoyed a big rise in value against the US dollar with the rate for buying funds from the market falling to JS$131.72 and selling by dealers closing at an average of $131.52, down from J$133.06 buying and J$134.76 selling.
The sharp improvement in the value of the local currency may not last in the short term, as the drop in the value of the US dollar versus the Jamaican dollar, was due mostly to big trades by National Commercial Bank well below the average for the rest of the market. The market is now in a period of increased supplies and lower demand that is likely to result in further appreciation of the local currency until April unless the central bank intervenes to buy excess flows from the market.
At the end of 2019, the selling rate for the US dollar was J$127.716 but the currency depreciated during the year to a low of J$141.89 to the US dollar on November 7.

National Commercial Bank bought US$32,148,142.99 at an average rate of J$129.83 and sold US$73,145,676 at J$130.16 each. The trade by the country’s largest commercial bank accounted for 48 percent of the total of US$67.5 million purchased and 70 percent of the US$104.3 million sold. After NCB, the next biggest trades were by Bank of Nova Scotia, in buying US$10.3 million, at an average of $132.60 and selling $7 million at $133.54.
The largest single purchase is US$25 million at $129 and the largest sale was US$68.35 million at J$130 each.

Filed Under: Feature Stories, FX Market Tagged With: BNS, Jamaican dollar vs US, National Commercial Bank, NCB, US Dollar

BOJ sells US$40m into forex market

November 12, 2019 by IC Insider.com

Add your HTML code here...

Bank of Jamaica sold US$40 million via B-FXITT to authorized dealers and Cambios to augment supply in the market on Tuesday.
“The factors behind the recent depreciation in the exchange rate are well known and Bank of Jamaica expects that these impulses will subside and that normalcy will return to the market. There has been an increase in demand for foreign currency due to the regular re-stocking by retailers for the Christmas season. Further, there has been extraordinary demand relating to portfolio transactions,” the central bank stated in a release today.
“Notwithstanding the recent depreciation, inflows into the foreign exchange market remained healthy. For October 2019, average daily inflow from earners was approximately US$31 million, in line with October 2018. However, driven by the factors noted above, demand has outstripped this supply,” the release went on to say.
The local currency moved in recent weeks and traded at $141.96 to one US dollar on average on Monday as dealers bought US$30.7 million at an average rate of $138.89 and sold $31.5 million at J$141.96 each. On Friday, dealers bought US$33 million at an average price of J$139.49 and bought US$30.2 million at J$141.89.

Filed Under: Breaking News, FX Market Tagged With: Bank Of Jamaica, FX rate for J$, US Dollar

BOJ sold US$30m to FX market on Friday

October 20, 2019 by IC Insider.com

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.

Filed Under: FX Market, General News Tagged With: Bank Of Jamaica, bFxitt, BOJ, jamaica forex market, Jamaican doollar, US Dollar

J$ gains moderate Jamaica’s inflation

October 20, 2019 by IC Insider.com

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.

Filed Under: Economy, FX Market

US$20m pumped into Jamaica’s forex market

April 8, 2019 by IC Insider.com

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.

Filed Under: FX Market Tagged With: Bank Of Jamaica, BOJ intervention, jamaica forex market, US Dollar

Jamaican dollar makes more gains

November 3, 2018 by IC Insider.com

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.

Filed Under: FX Market Tagged With: BNS, Canadian dollar, Citibank, Emerging markets, First Caribbean Bank, First Global Bank, FX trading, JMMB Bank, JN Bank, National Commercial Bank, Sagicor Bank, US Dollar, Victoria Mutual Building Society

J$ revaluation leads to more US$ selloff

October 31, 2018 by IC Insider.com

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.

Filed Under: Feature Stories, FX Market Tagged With: Bank of Nova Scotia Jamaica, JN Bank, National Commercial Bank, Sagicor Bank, Victoria Mutual Building Society

Some banks offloading US dollars

October 25, 2018 by IC Insider.com

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.