Trading in the Jamaican foreign exchange market on Wednesday resulted in the Jamaican dollar declining in value against the US dollar, following Tuesday’s decline with the selling rate ending at J$129.33 from J$128.77 previously, even as inflows rose over Tuesday’s intake.
Dealers bought the US currency at an average of J$128.16, versus J$127.36 on Tuesday. Trading ended with inflows of US$45.12 million compared to US$38.41 million on Tuesday with Bank of Jamaica is entitled to approximately 25 percent of the inflows or around $10 million of Wednesday’s intake. Outflows amounted to only US$45.80 million compared to US$35.70 million of all currencies on the prior trading day.
In USA dollar trading, inflows ended at US$39.70 million versus US$31.76 million on Tuesday with outflows of US$37.91 million compared to US$26.33 million.
The selling rate for the Canadian dollar fell to J$103.71 from J$104.44 at the close on Tuesday while the British Pound was more costly, with J$167.53 buying the British currency versus J$167.23 and the euro, rose in value against the Jamaican dollar, with it jumping to J$157.24 to buy the European common currency, versus J$156.41 previously.
Jamaican$ drops to J$129.33 to US$1
US$65m slated for sale by BOJ
The Bank will be offering USD65 million over the next four weeks in its foreign exchange auction to eligible Authorised Dealers and Cambios.
The amount represents an increase over the quantity offered in August of US$35 million prior to the amount to be auctioned on Wednesday, 30 August.
September is usually a period when inflows tend to dip below normal levels and may be the reason why the amounts to be offered have been increased.
The weekly schedule outlined by the BOJ is: US$5 million on Wednesday, 30 August, the same amount as last week, US$10 million on Wednesday, September 6, US$20 million on September 13 and US$30 million on September 20.
The central bank is only returning to the market amounts it would have taken under the compulsory surrender of 25 percent from Authorised Dealers and Cambios during the month. It is unclear as to the reasons why Bank of Jamaica has not reduced their compulsory take from the market. In 200 the central bank hiked the amount when the price of oil was around US$100 a barrel as the amount to fund Petrojam was being provided by BOJ. Now that the price is around U$50 why is the weekly take not reduced?
In 2009, Bank of Jamaica established the Foreign Exchange Surrender Facility for public sector entities (PSE Facility). 
The aim of the facility is to centralize foreign currency demand of the public sector, especially Port Authority of Jamaica, National Water Commission and Petrojam. Under this facility Commercial Banks agreed to surrender fifteen percent (15%) of foreign currency purchases daily. The pre-existing requirement where Authorized Dealers and Cambios surrender within range of five percent (5%) to ten percent (10%) of their gross foreign currency purchases from commercial clients remains in effect. Therefore commercial banks are to surrender, in total between twenty percent (20%) to twenty-five percent (25%) of foreign currency purchases daily. At the start of 2015, the surrender requirements were increased thirty percent to thirty-five percent for Authorised dealers and twenty-five percent for cambios.
Jamaican$ falls again – Tuesday
Trading in the Jamaican foreign exchange market on Tuesday resulted in the Jamaican dollar declining in value against the US dollar, following Monday’s decline with the selling rate ending at J$128.77 from J$128.68 previously.
Dealers bought the US currency at an average of J$127.36, versus J$127.23 on Monday. Trading ended with inflows of US$38.41 million compared to US$45.59 million on Monday with Bank of Jamaica is entitled to approximately 25 percent of the inflows or around $10 million of Tuesday’s intake. Outflows amounted to only US$35.70 million compared to US$30.40 million of all currencies on the prior trading day.
In USA dollar trading, inflows ended at US$ 31.76 million versus US$41.64 million on Monday with outflows of US$26.33 million compared to US$28.38 million.
The selling rate for the Canadian dollar climbed to J$104.44 from J$103.82 at the close on Monday while the British Pound was more costly, with J$167.23 buying the British currency versus J$166.02 and the euro, rose in value against the Jamaican dollar, with it jumping to J$156.41 to buy the European common currency, versus J$151.81 previously.
Value slips for Jamaican$ – Monday
Trading in the Jamaican foreign exchange market on Monday resulted in the Jamaican dollar declining in value against the US dollar, with the selling rate ending at J$128.68 from J$128.41 previously. Dealers bought the US currency at an average of J$127.23, versus J$127.17 on Friday.
Trading ended with inflows of US$45.59 million compared to US$32.69 million on Friday with Bank of Jamaica is entitled to approximately 25 percent of the inflows or around $11.4 of Monday’s intake. Outflows amounted to only US$30.40 million compared to US$19.34 million of all currencies on the prior trading day.
In USA dollar trading, inflows ended at US$41.64 million versus US$28.37 million on Friday with outflows of US$28.38 million compared to US$16.32 million.
The selling rate for the Canadian dollar climbed to J$103.82 from J$103.11 at the close on Friday while the British Pound was more costly, with J$166.02 buying the British currency versus J$165.59 and the euro, rose in value against the Jamaican dollar, with it taking J$151.81 to buy the European common currency, versus J$150.79 previously.
Lower interest rates ahead
Treasury bill rates on the decline and heading lower.
Investors chased $1.8 billion in Government of Jamaica Treasury Bills on offer on August 16 and pushed down the rates lower than in July, in the process.
The fall in rates helped the country’s central bank to lower its new benchmark overnight rate, by 25 basis points to 3.5 percent effective Friday August 25. The Treasury bill offerings, in tranches of $600 million each, replace $1.32 billion that matured in August. The offers with maturities of 91 days, 182 days and 273 days, resulted in average rates of 5.49 percent for the 91 days instrument, down from 5.63 percent in July, 5.99 percent for the 182 days bill down from 6.13 percent, with the 273 days bill, clearing at an average of 6.32 percent down from 6.5 percent in May.
The trend in interest rates is clear, with the downward drift resuming and needs to break below 5.8 percent for a sustained decline to take hold. It will only be a while, for Treasury bill rates to hit 4.5 percent but that is unlikely to happen until 2018. The accompanying chart shows the movement in the 182 days Treasury bill rate in red within a downward sloping channel pointing to lower rates ahead.
Jamaican$ gains as demand drops – Friday
Trading in the Jamaican foreign exchange market on Friday resulted in the Jamaican dollar rising modestly in value against the US dollar for the second consecutive day, with the selling rate ending at J$128.41 from J$128.65 previously.
Dealers bought the US currency at an average of J$127.17, versus J$127.26 on Thursday.
For the week inflows totaled US$181 versus US$196 million in the previous week with outflows of US$129 million compared to US$160 million.
Trading ended with inflows of US$32.69 million compared to US$32.08 million on Thursday with Bank of Jamaica is entitled to approximately 25 percent of the inflows or around $8 of the intake. Outflows amounted to only US$19.34 million compared to US$22.79 million of all currencies previously.
In USA dollar trading, inflows ended at US$28.37 million versus US$27.16 million on Thursday with outflows of US$16.32 million compared to US$18.32 million.
The selling rate for the Canadian dollar fell to J$103.11 from J$103.32 at the close on Thursday while the British Pound was more costly, with J$165.59 buying the British currency versus J$163.97 and the euro, fell in value against the Jamaican dollar, with it taking J$150.79 to buy the European common currency, versus J$153.31 previously.
Jamaican$ makes gains – Thursday
Trading in the Jamaican foreign exchange market on Thursday resulted in the Jamaican dollar rising modestly in value against the US dollar, with the selling rate ending at J$128.65 from J$128.73 previously.
Dealers bought the US currency at an average of J$127.26, versus J$127.59 on Wednesday. Trading ended with inflows of US$32.08 million compared to US$35.07 million on Wednesday with Bank of Jamaica is entitled to approximately 25 percent of the inflows or around $8 of the intake. Outflows amounted to US$22.79 million compared to US$29.29 million of all currencies previously.
In USA dollar trading, inflows ended at US$27.16 million versus US$36.43 million on Wednesday with outflows of US$18.32 million compared to US$26.43 million.
The selling rate for the Canadian dollar rose to J$103.32 from J$102.92 at the close on Wednesday while the British Pound was less costly, with J$163.97 buying the British currency versus J$165.58 and the euro, fell in value against the Jamaican dollar, with it taking J$153.31 to buy the European common currency, versus J$153.52 previously.
Jamaican$ slips in value – Wednesday
Trading in the Jamaican foreign exchange market by dealers on Wednesday resulted in the value of the Jamaican dollar falling modestly in value against the US dollar.
At the close of trading on Wednesday, the selling rate ending at J$128.73 from J$128.54 previously. Dealers bought the US currency at an average of J$127.59, versus J$127.12 on Tuesday. Trading ended with inflows of US$39.57 million compared to US$35.07 million on Tuesday with Bank of Jamaica is entitled to approximately 25 percent of the inflows or around $10 of the intake. Outflows amounted to US$29.29 million compared to US$27.21 million of all currencies previously.
In USA dollar trading, inflows ended at US$36.43 million versus US$31.40 million on Tuesday with outflows of US$26.43 million compared to US$25.35 million.
The selling rate for the Canadian dollar rose to J$102.92 from J$102.23 at the close on Tuesday while the British Pound was less costly, with J$165.58 buying the British currency versus J$165.79 and the euro, increased in value against the Jamaican dollar, with it taking J$153.52 to buy the European common currency, versus J$152.54 previously.
Forex inflows drop to US$35M – Tuesday
Trading in the Jamaican foreign exchange market on Tuesday ended with inflows of US$35.07 million compared to US$42.09 million on Monday. Bank of Jamaica is entitled to approximately 25 percent of the inflows or around $8.77 of Tuesday’s intake.
Outflows amounted to US$27.21 million compared to US$30.70 million of all currencies previously.
In USA dollar trading, inflows ended at US$31.40 million versus US$38.96 million on Monday with outflows of US$25.35 million compared to US$27.86 million.
The value of the Jamaican dollar fell modestly in value against the US dollar, with the selling rate ending at J$128.54 from J$128.45 previously. Dealers bought the US currency at an average of J$127.12, versus J$127.18 on Monday.
The selling rate for the Canadian dollar inched to J$102.23 from J$102.12 at the close on Monday while the British Pound was more costly, with J$165.79 buying the British currency versus J$164.90 and the euro, slipped in value against the Jamaican dollar, with it taking J$152.54 to buy the European common currency, versus J$152.95 previously.
Forex inflows climb to US$42M – Monday
Trading in the Jamaican foreign exchange market on Monday ended with inflows of US$42.09 million compared to US$35.35 million on Friday. Bank of Jamaica is entitled to approximately 25 percent of the inflows amounting to $10.52 of Monday’s intake. Outflows amounted to US$30.70 million compared to US$30.09 million of all currencies previously.
In USA dollar trading, inflows ended at US$38.96 million versus US$28.90 million on Friday with outflows of US$27.86 million compared to US$26.16 million.
The value of the Jamaican dollar gained modestly in value against the US dollar, with the selling rate ending at J$128.45 from J$128.50 previously. Dealers bought the US currency at an average of J$127.18, versus J$127.11 on Friday.
The selling rate for the Canadian dollar fell to J$102.12 from J$101.50 at the close on Friday while the British Pound was less costly, with J$164.90 buying the British currency versus J$166.16 and the euro, jumped in value against the Jamaican dollar, with it taking J$152.95 to buy the European common currency, versus J$149.50 previously.