Jamaica dollar in modest recovery

The Jamaican dollar traded at an average of $136.94 to the US dollar on Tuesday. Dealers sold US$52.7 million and bought $49.4 million at an average of $135.81.
Tuesday’s total intake of funds, amounted to the equivalent of US$61.96 million while US$62.65 million left the system.
Unlike Friday and Tuesday, Monday’s trading was moderate, with just US$27.65 million in all currencies bought by dealers and the selling of US$30.4 million. Buying of US dollars amounted to US$24 million at an average rate of J$134.56 and selling of US$28 million at $137.10 on Monday, compared to selling of US$40 million on Friday at $137.01. On Friday dealers sold a total of US$46.8 million in all currencies, having bought US$53.5 million, including $44.7 million in US dollars currency.
On Wednesday, last week, Bank of Jamaica sold $16.5 million to dealers pushing the total purchased for that day to US$57 million, while they sold $43.3 million at an average of $137.32. Trading of all currencies saw a total of US$55 being sold against $69 million bought by dealers.
On Thursday dealers bought only US$29.78 million, but sold US$51.4 million, with the rate clearing at an average of $137.55. In all, dealers sold the equivalent of US$53 million in all currencies.
Last week Wednesday, the BOJ offered US$16.5 million to the market and received 46 bids of US$39.15 million. The average clearing rate was $137.03. The highest bid was $137.50 and the lowest $135. On Wednesday, September 5, US$11 million, to be followed by US$10 million per week, over the next three weeks.

BOJ cuts compulsory take

Jamaica’s Central Bank head quarters Downtown Kingston

Foreign exchange dealers and cambio operators will surrender 5 percentage points less foreign exchange to Bank of Jamaica, (BOJ) effective 7 February. Jamaica’s central bank announced the reduction on Friday, the second time within three months.
The amount required to be sold to the central bank will be 20 percent by Authorised Dealers and 15 percent for cambios of daily purchases.
According to BOJ, “the continued reduction in surrender requirements, in conjunction BOJ Foreign Exchange Intervention and Trading Tool (B‐FXITT)with the , is in keeping with BOJ’s ongoing reform programme to make its interaction with the foreign exchange market more transparent and to improve the efficiency and transparency of the FX market in general. The central bank expects this reduction in surrender requirements to improve liquidity conditions in the FX market and contribute to its deepening. Going forward, the central bank will conduct periodic reviews of market conditions and other factors to determine the scope for further reductions in the surrender requirements, concurrently with further enhancements to B‐FXITT.”
In October, Bank of Jamaica stated that the present arrangement requiring foreign exchange dealers to surrender around 25 percent to 30 percent of their daily intake is to be phased out. The central bank now considered that the market is deep and liquid enough for government entities to go directly into the market for their needs. After that announcement the central bank followed up with a 5 percentage points cut in the amount to be surrendered in October.
In other developments within the FX market the central bank notified the market that they do not intend to have any auction of foreign exchange for the period ending February 13. The last B‐FXITT auction was on Wednesday, 29 November 2017 for the sale of US$4 million. Since then the central bank bought foreign currency from the market.