J$127.77 mid-day rate for US$

Authorised dealers bought US$9,913,199 at an average rate of J$127.137 up to mid day on Thursday and sold US$5,243,960.45 at an average of J$127.769.

On Wednesday at midday, the selling rate of the US dollar was $127.85, with US$12 million being sold. In Thursday’s session dealers bought C$6,640,074 at J$102.817 each and sold just C$98,944.26 up to the same time.

Forex demand drops

The number of bids posted in the Bank of Jamaica B-FXITT auction on Wednesday dropped from 42 bids totaling $62.6 million last week, to 36 this week for only US$20.55 million this week.
The central bank made US$10 million available for purchase on Wednesday this week, 18 bids were accepted, with rates ranging from $130.05 to $130.50, with the latter for US$1.2 million. The average rate came out at $130.28, down from an average of rate of J$131.36 last week.
Bank of Jamaica sold US$30 million in last week’s auction on Wednesday to eligible Authorised Dealers and Cambios.

BOJ forex auction clears at J$131.36

Bank of Jamaica sold US$30 million that it auctioned on Wednesday, September 20, to eligible Authorised Dealers and Cambios, at an average of rate of J$131.36 to one US dollar.
The central bank received 42 bids totaling $62.6 million of which 17 were successful, in its B-FXITT Standard Intervention Tool. The highest bid rate was $131.80 to purchase US$3 million, with the lowest being $121.28 to buy US$1 million.
At the auction, last week Wednesday, a total 45 bids amounting to US$60.9 million chased, the $20 million Bank of Jamaica offered for sale, resulting in an average rate of $131 to buy the US dollar on offer. The auction’s highest bid then was $131.10 to purchase US$2.3 million.

Dealers bid up rates at BOJ FX auctions

Bank of Jamaica introduced a new system in providing foreign exchange to the local market by offering a weekly amounts for sale, in the first instance. In the latest offering the average rate climbed to $131 as demand exceeded the amount on offer.
Later on, presumably in the winter months, when inflows are much higher then, the auction will accommodate both buying and selling, with the central bank buying or selling as the circumstance dictates.
AT the auction, last week Wednesday, a total 45 bids amounting to $60.9 million chased, the $20 million Bank of Jamaica offered for sale, resulting in an average rate of $131 to buy the US dollar on offer. The auction highest bid was $131.10 to purchase US$2.3 million. In the previous week’s auction, BOJ offered US$10 million that attracted 43 bids amounting to US$29.1 million, with the highest rate at $130.50 to buy $1 million. Bank of Jamaica on Thursday, August 31, had a special unscheduled offer of $35 million available to the market pulling in 31 bids amounting to US$70.2 million chasing the offer. The next auction will see BOJ auctioning off US$30 million this week Wednesday as announced at the start of the month.

Huge surge in NIR mostly temporary

Jamaica’s international reserves surged to $4.25 billion at the end of August, with net reserves climbing to $3.67 billion, up from a net of US$2.74 billion at the end of July.
The increase came from a number of sources with the inflows from the issue of bonds by the Government of Jamaica (GOJ) as well as inflows from the foreign exchange market.
“The increase in the NIR of US$933 million in August 2017 was attributed mainly to receipts from Eurobond of US$834.4 million by GOJ, net purchases of foreign exchange by BOJ from authorised foreign exchange traders and issuance of BOJ USD CDs,” Bank of Jamaica confirmed in response to an IC Insider.com’s query.
“Notably, the impact of the large inflow from the GOJ Eurobond is transitory. During September, GOJ will pay approximately US$530 million (principal and interest) to investors on prepayment of two USD Bonds,” the BOJ’s response concluded.
Data for the first two weeks in September suggest that there is likely to be no new net inflows for the month from the regular foreign exchange market and the NIR could end at just about US$3.1 billion after the payout of the GOJ bonds, if BOJ does not issue new CDs to mop up the liquidity that would flow from the payout.

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.

BOJ auction rate climbs to $129.15

Bank of Jamaica (BOJ) offer of US$5 million offer of it foreign exchange auction attracted 33 bids amounting to $15.2 million with rates as high as $129.42. The average of all bids made was $128.94 but the auction cleared at $128.97 with 11 bids accepted, at an average at $129.15.
The out turn in the daily foreign exchange market resulted in the US dollar 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.
In the previous auction held on August 16, BOJ offer of US$10 million attracted 38 bids amounting to US$28.2 million at an average rate of $128.67. The average rate of 17 accepted bids was $128.74.
At the official start of the auctioning of foreign exchange BOJ announced that it will make US$10 million dollars available to authorized dealers and eligible cambios on Wednesdays up to August 16, totalling US$40 million. It is not clear why BOJ dropped the amount to US$5 million in the latest offer.

Jamaican economy throwing up goodies

The Jamaican economy seems to be humming along pretty well, based on a number of critical measures that are available as well a physical evidence seen elsewhere.
There seems to be increased traffic around the corporate area at various times of the day, even when school is closed, thus reducing much of the normal peak hours traffic. Information from the Tourism sector is that visitor arrivals have climbed sharply since the winter months. There is strong evidence of increased construction activities with buildings be constructed across the length and breathe of Kingston and elsewhere in the country for commercial and residential purposes.
An examination of government’s statistical data is confirming some of these developments. Corporate taxes are up 33 percent over 2016 for the first 3 months of the fiscal year, an indication of higher sales and profit being generated. Education tax is running 7.7 percent ahead of projections and 13 percent above last year’s intake. Contractors levy is up over 2016 by 27.5 percent ahead of forecast, to reach $391 million and some 33 percent ahead of the intake for 2016 of $293 million, a good indicator of the health of the construction sector.
Traditional Exports are holding their own but with a slight fall in earnings for January to April 2017 of 1.5 per cent or US$3.4 million below the comparable 2016 period to US$216 million, but Non–Traditional Exports in the same period grew 36.2 percent or US$51 million above the US$140.9 million earned in the 2016 to reach US$192 million. Traditional exports should get a boost in the second half of the year with the resumption of alumina production at Alpart. Another critical indicator of increased health of the local economy is the second largest number of persons employed within a one year period of 35,500, for the twelve months to March 2017, only bettered by increased employment of 40,500 more persons between March 2015 and 2016,

The Hampshire Apartments complex being built by Guardian Life.

this number could have be swollen by persons employed due to the general elections that were held in February and staid on until sometime after. The 2017 numbers of newly employed, compares favourably with 2007 with 36,500 newly employed, 2006 with 41,900, 2005 with 35,500, but well below the 72,700 newly employed between April 2002 and 2003. Bank credit has expanded to one of the fastest pace for some time with an increase of 17 percent to $495.759 for banks excluding that was not so clarified in 2016. The growth is well over the approximately 4 percent inflation over the period.
Of course, business confidence is at record levels, as investors pump more investments into the local stock market, driving it to new record highs on the last day of July, with increases expected in the months ahead.
Recent data in the forex market shows it generating strong net inflows with the local currency enjoying some revaluation after a slight fall earlier in the year.

BOJ forex auction clears at $128.26

Jamaica’s Central Bank head quarters Downtown Kingston

The exchange rate for the purchase on US$10 million on sale by Bank of Jamaica in its first official forex auction of US dollars, held on Wednesday, ended with an average of JS$128.26. The highest rate of a successful bid was J$128.30.
The rate contrast with the first auction done as a trial run, that was executed at an average rate of $128.76. Interestingly, the average selling rate that the US dollar was sold at on Wednesday in the interdealer forex market ended at an average of $128.2173 with the highest selling rate going at $147.60.
A total of 41 bids were received amounting to US$26.18 million and a total of 13 bids were accepted by the central bank. Bids are restricted to a maximum of 20 percent per institution for the amount offered with the minimum US$100,000. The highest accepted rate was $128.50 to purchase US$1,600,000. The lowest bid received was $128.30 that was partially allocated while the lowest bid fully allocated was $128.35 that purchased US$5,050,000.
Bank of Jamaica will make US$10 million dollars available to authorized dealers and eligible cambios by competitive bidding process each Wednesday, from Wednesday July 26 through Wednesday August 16, a total of US$40 million for the first four‐week period. The Bank will publish a report from each B‐BXITT operation on the same day, including the weighted average exchange rate arising from the operation.
The next forex intervention auction sale for US dollars is scheduled for Wednesday August 2, with settlement on Thursday August 3.

Jam$ gains on reduced trading

The Jamaican dollar recorded further gains at the close of foreign exchange Tuesday with the selling rate of J$128.46 for one US dollar, down from J$128.50 it ended at on Monday.
Inflows into the local foreign exchange market generated just US$23.84 million in all currencies while US$22.52 million was sold to the public. In USA dollar trading, inflows into the system ended at US$21.54 million while selling amounted to only US$20.36 million. Inflows are well down on the US$61 million that entered the system last week Tuesday and outflows the US$46 million of all currencies then traded.
The selling rate for the Canadian dollar inched up to J$99.01 compared to J$98.94 at the close on Monday, while the British Pound cost more at the close on Tuesday with J$166.91 buying the British currency versus J$166.38 on Monday but the Jamaican dollar gained value against the euro, with it taking J$145.20 to buy the European common currency on Tuesday versus Monday’s rate of J$146.61.