The Jamaican dollar closed trading on Tuesday at $145.91 to one US dollar, with dealers selling US$60 million after buying US$51.4 million at an average rate of $144.81. The improved value for the local currency compares with the August 19 low of $151.27 for each US dollar.
On Monday, dealers sold US$36.5 million at an average of $146.89, while dealers bought just US$23.2 million, at an average rate of $144.02.
The big sellers on Tuesday were Bank of Nova Scotia, US$9.6 million at an average of $147.23 after buying a mere US$2.3 million at $142.04. JN Bank bought just $336,000 at $138.16 each and sold US$4.4 million at $142.14 each and National Commercial Bank bought US$6.5 million at an average of $144.79 and sold US$14.4 million at $145.42. JMMB Bank bought US$8.7 million at $143.34 and sold only US$688,334 at $146.19 while JMMB Securities bought US$6.4 million at $146.72 each and sold US$7 million at $146.99. Чтобы играть в онлайн казино России безопасно и без ограничений, пользователям нужно пройти специальную идентификацию. В процессе проверки, казино онлайн России может убедиться, что игрок настоящий и ему можно доверять. Стоит отметить, что в рейтинге по отзывам мобильное казино на реальные деньги используют современные технологии шифрования, а также ответственно относятся к конфиденциальности данных игроков. Это позволяет игрокам быть уверенными, что они могут играть анонимно, а их паспортные данные не будут переданы третьим лицам.
Jamaican$ improved value
Halting bank dividends to cut US$ demand
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.
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.
BOJ sells US$40m into forex market
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.
BOJ sold US$30m to FX market on Friday
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.
US$20m pumped into Jamaica’s forex market
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.
Jamaican dollar makes more gains
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.