Bank of Jamaica’s intervention in the forex market last Thursday, continued to affect forex trading on Monday, leaving dealers with US$14 million surplus between Thursday and Monday.
In the three days period they bought US$23 million more of all currencies, than the sold. In today’s trading the Jamaican currency appreciated against all three major currencies that trading takes place in. On Monday, dealers bought the equivalent of $42,467,751 versus US$34,345,235 on Friday and sold the equivalent of US$33,244,982 compared to US$27,608,212 sold on Friday.
In US dollar trading, dealers bought US$37,691,477 compared to US$26,461,541 on Friday as the buying rate for the US dollar, fell 3 cents to $112.03 and sold US$31,281,273 versus US$22,353,327 on Friday, with the rate falling 6 cents to $112.62.
The Canadian dollar buying rate dropped $2.34 cents, to $102.24 with dealers buying C$1,153,328 and selling just C$666,699 as the rate declined 51 cents, to $104.82.
The Pound closed at $189.67, for the purchase of £1,763,030, the rate fell $1.61, while £559,580 was sold, with the rate declining by 52 cents, to $192.13. Other currencies bought, amounted to the equivalent of US$738,897 while selling was the equivalent of just US$388,590.
Highs & Lows| The highest rate for buying the US dollar, rose 10 cents to $113.10, the lowest buying rate was unchanged at $92.02 but the highest selling rate rose $4.09, to close at $122 and the lowest selling rate dropped $18.35 to $91.85.
The highest buying rate for the Canadian dollar fell by 85 cents, to $105.10 and the lowest buying rate fell 21 cents, to $83.62, the highest selling rate rose by 54 cents to $108.61 and the lowest settled at 25 cents lower at $100.75.
The highest buying rate for the British Pound, was up 75 cents to $193.75, while the lowest buying rate eased by 4 cents to $154.71 and the highest selling rate rose by $3.16 to $199.45, the lowest selling rate was down by 5 cents at $186.40.
J$ gains as BOJ intervention still impacts market
BOJ’s intervention still impacts FX market
Bank of Jamaica’s intervention in the forex market on Thursday, continued to affect forex trading on Friday and seems set to do so on Monday, usually the biggest trading day.
On Friday the selling rates for all three main currencies declined, as the Jamaican dollar strengthened. On Friday, dealers bought the equivalent of $34,345,235 versus US$81,413,723 on Thursday and sold the equivalent of US$27,608,212 compared to US$76,753,326 sold on the previous day.
In US dollar trading, dealers bought US$26,461,541 compared to US$79,215,627 on Thursday as the buying rate for the US dollar fell 45 cents to $112.06 and sold US$22,353,327 versus US$75,110,656 on Thursday, with the rate falling 2 cents to $112.69.
The Canadian dollar buying rate rose $1.78 cents, to $104.58 with dealers buying C$3,168,875 and selling, C$3,114,771 as the rate declined 66 cents, to $105.33.
The Pound closed at $191.28, for the purchase of £2,827,323, the rate climbed $2.08, while £1,313,681 was sold, with the rate declining by 32 cents to $192.66. Other currencies bought, amounted to the equivalent of US$100,110 while selling was the equivalent of just US$97,465.
Highs & Lows| There were several highs and lows that were unchanged at the end of trading. The highest rate for buying the US dollar fell 20 cents to $113, the lowest buying and the highest selling rates were unchanged at $92.02 and $117.91 respectively and the lowest selling rate rose 40 cents to $110.20.
The highest buying rate for the Canadian dollar fell by 25 cents, to $105.95 and the lowest buying, the highest and lowest selling rates were unchanged at $83.83, $108.07 and $101 respectively.
The highest buying rate for the British Pound, fell 30 cents to $193, while the lowest buying rate was unchanged at $154.75 and the highest selling rate declined by $3.27 to $196.29, the lowest selling rate was unchanged at $186.45.
Bank of Jamaica tames market with big sale
Bank of Jamaica’s announcement on Wednesday that they would intervene in the forex market on Thursday, led to heavy volume of US dollar being bought and sold, with dealers buying US$79.2 million and selling US$75 million, the rate for selling the US dollar slipped back by 3 cents Jamaican to J$112.71, compared with J$112.74 on Wednesday.
On Thursday, dealers bought the equivalent of $81,413,723 versus US$30,976,689 on Wednesday and they sold the equivalent of US$76,753,326 compared to US$27,377,149 sold on the previous trading day.
In US dollar trading, dealers bought US$79,215,627 compared to US$27,065,797 on Wednesday as the buying rate for the US dollar rose 36 cents to $112.50 and sold US$75,110,656 versus US$29,837,045 on Wednesday, with the rate falling 3 cents to $112.71.
The Canadian dollar buying rate fell 33 cents, to $102.79 with dealers buying only C$749,467 and selling even less, C$510,916 as the rate declined, 56 cents to $105.99.
The Pound closed at $189.20, for the purchase of £751,860, the rate declined 19 cents, while £341,356 was sold, with the rate unchanged at $192.97. Other currencies bought, amounted to the equivalent of US$248,856 while selling was the equivalent of just US$577,766.
Highs & Lows| The highest rate for buying the US dollar fell 5 cents to $113.20, the lowest buying and the highest selling rates were unchanged at $92.02 and $117.91 respectively and the lowest selling rate rose $16.33 to $109.80.
The highest buying rate for the Canadian dollar was up by 10 cents, to $106.20 and the lowest buying rate was unchanged at $83.83. The highest selling rate fell 32 cents, to $108.07 and lowest selling rate was unchanged, at $101.
The highest buying rate for the British Pound, fell 35 cents to $193.30, while the lowest buying rate was unchanged, at $154.75 and the highest selling rate climbed by $3.22, to $199.56, the lowest selling rate was rose $1.35 cents, to $186.45.
FX: BOJ action pushes rate down
Thursday, 20 March 2014 | Bank of Jamaica pushed down foreign exchange rate for the Jamaican dollar when it intervened by making funds available to Authorized Dealers and Cambios at a rate of US$1 to J$109.346 for resale at US$1 to J$109.396. This comes against the rate continuing to race after the Central Bank issued a release on Sunday stating that they were willing to lend support to the market. In other words, a veiled attempt at saying the market was being manipulated.
On Sunday the BOJ stated “Against the background of recent movements in the exchange rate, Bank of Jamaica wishes to assure the public that it stands ready to provide support to prevent disorderly conditions from emerging in the foreign exchange market. Since the beginning of March 2014 the exchange rate has depreciated by J$0.93 (0.85%) against the US dollar. This movement over the two-week period compares to a J$0.49 (0.45%) depreciation over the previous two weeks. The faster pace of depreciation has occurred despite increased supply in the foreign exchange market, where volumes from earners for the month to date are higher than for January and February 2014.”
Purchases & Sales | Authorized Dealers bought US$44,344,150 at $109.15 which gained a cent but dumped US$66,475,637 or US$22 million more than the amount bought at $109.42, 24 cents less than on Wednesday, as dealers who were hording the currency released a large portion of their holdings. In contrast US$41 million was bought on Wednesday and $39 million sold. Between Friday last and Wednesday, dealers bought US$17.5 million more than they sold resulting in a total of $22.7 million surplus of buying over selling of all currencies traded.
There was buying of C$478,746 at $95.34 that was off by $1.50 and selling of C$358,349 at $1.57 down to $97.53. The buying of the pound amounted to £636,781 at $1.94 down to $177.75 and sold £317,117 at $181.16 at 76 cents less than on Wednesday.
Other currencies sold came to the equivalent of US$667,774 with US$635,271 sold.
The total amount of foreign exchange traded came to the equivalent US$46,467,181 being bought and US$67,955,336 sold.
Highs & Lows | The highest buying rate for the US dollar fell 70 cents to $110.30, the lowest was up 25 cents to $88.76 while the highest selling rate came out unchanged at $113.74 and the lowest was up $1.40 to $89.91.
The highest buying rate for the Canadian dollar is down $1.25 to $98.50, the lowest moved down by 62 cents to $77.44. The highest selling rate was lower by 52 cents at $100.63 and $2.40 came off the the lowest rate to end at $93.30.
The highest buying rate for the British Pound is 10 cents down at $183.10, the lowest buying rate gained 21 cents and ended at $144.84, while the highest selling rate climbed $1.59 to $186.71 and the lowest fell $1.90 to $175.10.
Related post | BOJ suggests FX stability close
BOJ suggests FX stability close
Bank of Jamaica, in an unusual weekend press release, indicated that positive trends in the economy and increased flows of foreign exchange in March over the first two months of the year will provide an increasingly solid base for improved stability in the foreign exchange market.
“Since the beginning of March 2014, the exchange rate has depreciated by J$0.93 (0.85%) against the US dollar. This movement over the two-week period compares to a J$0.49 (0.45%) depreciation over the previous two weeks. The faster pace of depreciation has occurred despite increased supply in the foreign exchange market, where volumes from earners for the month to date, are higher than for January and February 2014.” the central bank stated in a release this evening.
“Jamaica’s main economic indicators continue to improve with economic growth resumed in the September quarter and is expected to strengthen over the subsequent six months in the range of 1.0 per cent to 2.0 per cent. Preliminary estimates of the balance of payments indicate that the current account deficit was reduced sharply over the period April 2013 to September 2013, by approximately US$350.0 million. The current level of net international reserves (NIR) is US$1,121.4 million, increasing by US$52.0 million since the end of February 2014. Bank of Jamaica now expects to comfortably meet the NIR target under the International Monetary Fund agreement for the March 2014 quarter. Finally, headline inflation was lower than projected at 0.5 per cent for the month of January and the fiscal year to March 2014 is now likely to fall close to or below the bottom of the 8.5 per cent to 10.5 per cent target range. The BOJ stated that against the background of recent movements in the exchange rate, they wish to assure the public that it stands ready to provide support to prevent disorderly conditions from emerging in the foreign exchange market.” the release concluded.
2013 Remittance inflows top $2B
Total remittance inflows into Jamaica for 2013 hit a record of US$2.07 billion, US$23 million more than the amount received in 2012, which was the previous record year at US$2.043 billion according to data from the Bank of Jamaica. Net remittances for January to December 2013 were US$1.82 billion, an increase of US$49 million compared to 2012.
The out-turn for December reflected an increase in gross remittance inflows and a contraction in outflows with net remittances for the month reaching US$176 million, an increase of US$2.2 million over the similar period of 2012. Gross remittance inflows for the month were US$195 million, a decrease of US$1.7 million relative to December 2012.
Image courtesy of Boaz Yiftach/FreeDigitalPhotos.net
For the fourth quarter of 2013, net remittances were US$476 million, an increase of US$27 million or 6.0 per cent relative to the corresponding quarter of the previous year resulting from an increase in gross remittance inflows and a contraction in remittance outflows.
Total remittance inflows for the December quarter were US$533 million, representing an increase of US$16 million or 3.0 per cent relative to the corresponding quarter of the previous year.
Related posts | Remittance inflows continues up | October remittances up
Remittance inflows continues up
Remittance inflows for November last year were US$168 million, an increase of US$10 million or 6.3 per cent compared to the corresponding month in 2012. The rise in total remittance inflows reflected an increase of US$8.0 million in inflows through Remittance Companies and an increase of US$2 million in inflows by other sources.
Net remittances flows were US$149.4 million for November 2013, an increase of US$13.5 million or 9.9 per cent versus the corresponding month in of 2012. The growth in net remittance inflows reflected an increase in gross remittance inflows and a contraction in outflows.
Total remittance inflows from January to November 2013 were US$1.87 billion, an increase of US$24 million over the flows for the similar period in 2012.
The increase in total remittance inflows reflect an increase of US$15 million in inflows through Other Remittances and an increase of US$9 million in inflows through Remittances Companies.
Net remittances for January to November 2013 were US$1.65 billion representing an increase of US$47 million or 2.9 per cent relative to 2012. The outturn for the review period reflected an increase in gross remittance inflows and a contraction in outflows.
Related posts | October remittances up
Business conditions mending?
The perceptions about present and future business conditions improved significantly in the most recent survey relative to the previous survey done in November last year. The survey was commission by Bank of Jamaica and undertaken by Statin.
In the most recent survey, the index hit 97.5 for current business conditions, up strongly from 66.6 in October and 87.4 in September and is at the highest level since June 2012 that was recorded at 115.1. However, the perception of future business conditions remained below the levels recorded in FY2011/12.
The business sector is very bullish on the future, as the future expectations reading is now up to 125 compared to 98.6 in October and is at the highest since November 2012 at 130.6.
About the survey | The Statistical Institute of Jamaica (STATIN) undertakes surveys of businesses on behalf of the Bank of Jamaica to ascertain the expectations of economic agents about variables which are likely to have an impact on inflation in the near-term. In this regard, the survey captures the perception of Chief Executive Officers, Managing Directors and Financial Controllers about the future movement of prices, current and future business conditions and the expected rate of increase in wages/salaries.
Related posts | Business confidence drops 24%
Interest rate rise & fall
Interest rates on the latest issues of treasury bills by the Government of Jamaica on the 15th and 24th of January 2014 to provide funding for $1.2 billion showed mixed results.
Three offerings were available of $400 million each for duration of 28 days, 91 and 182 days. The rate on the 91 day instrument resulted in an average rate of 7.4292 percent a slight decline compared with the last issue of same duration, the rate for the 182 day instrument came out at 8.71734 percent reflecting a rise over the 8.25335 percent that obtained at the December 2013 auction, the 91 day issue resulted in an average rate of 7.5338 percent.
Investors received rates as high as 7.77998 percent for the 30 day T-Bill and as high as 10 percent for the longer dated instrument. Just over 11 percent of investors’ funds benefited from the higher yield for the 90 day paper buy. It was as high as 6.969 percent for the short term T Bills.
On January 15, an issue of a 28 day Treasury bill resulted in an average rate of 6.12 percent similar to the issue in December 2013 with a 6.12 percent average rate for the 28 day offer maturing in January and continues to compare favourably with the 6.2522 percent that obtained at the offer in November.
Related Posts | Interest rate eases
GOJ’s program for reduction & growth
The principal objective of the Government of Jamaica’s programme is to reduce the national debt and raise the sustainable growth rate of our national output.
The governor of the Bank of Jamaica, Bryan Wynter, stated in a recent address at a JMA’s 2014 Economic Forum, that the Government has committed to implementing revenue, expenditure and debt management measures to ensure that the debt goes down in relation to GDP. This commitment entails the achievement of annual primary surpluses of 7.5% of GDP over the life of the programme. The governor went on to outline other measures that are to be put in place to achieve the main objectives.
“With this,” he stated, “the borrowing need of the Government has fallen sharply, which is leading to a steady reduction in the debt to GDP ratio to below 100% by 2020. Government intends to make the current fiscal responsibility framework stronger by developing binding fiscal rules. This will increase transparency, lock in the gains of fiscal consolidation and ensure that budgets will be sustainable even beyond the end of the four-year IMF agreement.
Image courtesy of arztsamui/FreeDigitalPhotos.net
“A central plank of the programme is the implementation of structural reforms aimed at creating an environment supportive of economic growth. One of the main structural reforms to which the Government has committed is the improvement of the tax system, including tax administration.
“Fiscal incentives legislation was also passed in December which overhauls and simplifies decades of tax law to the advantage of productive businesses.
“To kick-start growth, the government has started to implement catalytic, strategic, public-private investments. Already, the government has initiated production in six agro-parks, aimed at import substitution. The objective is to develop a total of nine such parks by the end of 2014.
“The GOJ is also committed to improving the competitiveness of the economy through legislative and administrative changes. Additionally, amendments to the Companies Act were passed which streamline the business registration process through the use of a multi-purpose registration instrument. A bill to modernise our bankruptcy rules, the Insolvency Bill, was also tabled in Parliament.
“The Government is in the process of establishing a Port Community System to electronically integrate and streamline export and import procedures. It is also moving to establish more flexible work arrangements and improve access to skills training. Furthermore, initiatives to achieve energy diversification and conservation are in progress.
“Supporting these reforms will be the preservation of a stable macroeconomic environment through sound monetary and fiscal policies. Inflation is expected to decline over the medium term towards our long-run objective. This decline in inflation, in conjunction with a more competitive exchange rate, will foster increased price competitiveness of Jamaica’s exports of goods and services.
“Lower inflation will also allow Jamaican businesses to finance investments at lower interest rates. The reduction in fiscal deficits and the public debt will make more resources available to the productive sector and will complement Bank of Jamaica’s thrust to maintain single-digit inflation.
“The Government also committed to undertaking reforms which will increase the efficiency and competitiveness of the financial system and credit market. You may have seen in the media recently, where we committed to a timetable for raising the cap on investments in foreign securities from 5% of assets to at least 25% by end-2015 and removing it by end-2016, unless extraordinary circumstances require a reassessment. The drafting of Jamaica’s Omnibus Banking statute, which includes regulations to give consumers increased protection and to underwrite the regulatory basis for agency banking, is far advanced.
“We are confident that we will be successful with the December test both with respect to the structural benchmarks and the quantitative performance criteria. More importantly, the Government is already looking ahead to the coming fiscal year with a view to crafting policies and commitments aimed at further improving the business climate in Jamaica and securing stronger growth.
“The economy began its recovery during the September quarter, registering growth of 0.5 per cent. We expect that growth of a little under 1.0 per cent will materialise for the fiscal year, in line with our projections.
“As the economy stabilises, the fiscal and external balances improve and the debt ratios are brought down towards sustainable levels, we should see the Government being able to address more effectively important social and developmental issues such as education and training and crime and social peace.”
Related posts | Ministry confirms deficit wipe out | Major cost input for production in 2013 | 2013 inflation 9.7%, worse than 2012
