Rates payable on Bank of Jamaica CD instruments declined for six consecutive weeks following applications received in response to an offer of $32 billion by the Bank of Jamaica today and resulted in an average yield of 8.11% for successful bids, down from 8.32 percent last week.
The auction attracted 257 bids for just over $46.43 billion, with 199 successful. The lowest submitted rate was 7.5 percent and the highest at 10.25 percent, down from 11 percent in the previous auction, with a partially successful bid at 8.25 percent, down from 8.35 percent previously.
The total amount of 30 days CDs is now $103 billion, down from $106 billion last week.
BOJ CD rate falls again
April 26, 2023 by
BOJ CD rate drop for a second week
March 30, 2023 by
Rates paid on Bank of Jamaica 30 days CDs dropped for a second week at the latest auction on Wednesday this week, to 8.49 percent from 8.85 percent on March 22.
The rate declined from 10.54 percent at the auction on March 17 after BOJ offered $18 billion, which attracted $57.86 billion on March 22. At this week’s auction, $35 billion was offered by the central bank and attracted $70 billion, resulting in the highest successful rate at 8.85 percent and the lowest at 7.5 percent, down from 8.2 percent the week before. BOJ absorbed $88.85 billion at the end of the CD auction, up from $81.85 billion the previous week but still down sharply from a peak at $109.5 on March 1.
The move brings the CD rates in line with Treasury bills, with an average rate for 90 days coming in at 8.21 percent on March 8.
Sharp16% plunge in BOJ CD rate
March 23, 2023 by
The latest Bank of Jamaica 30 days CD offer on March 22 resulted in the first significant shift in interest rates, with the average rate plunging by 16 percent to 8.85 percent compared with the previous one held on March 17 2023, delivered an average rate of 10.54 percent.
The drop in rates and the amount of funds in BOJ CDs are the first signals that interest rates will be going down in the months ahead with the low level of inflation the country is now experiencing, with a monthly average of 0.20 percent monthly since November last year accompanied by revaluation of the local currency in recent weeks.
While the previous offer attracted 250 bids amounting to $14.98 billion with yields as high as 13.17 percent, the latest offer pulled in 348 bids valued at $57.86 billion, but only $18 billion was offered.
The highest successful bids for the March 22 offer received 9 percent, down sharply from the March 17 yield. BOJ cut the amount of funds held in CDs to $81.85 billion, down from $92.85 billion for the March 17 offer and $104.5 billion at the February 24 auction, which resulted in an average interest rate of 9.87 percent. BOJ has eased the tight liquidity that characterized the market for several weeks.
