BOJ sold US$30m to FX market on Friday

BOJ interest cuts overnight rate.

Bank of Jamaica (BOJ) intervened in the foreign exchange market on Friday, October 18, the first time since July by selling US$30 million at a weighted average rate of $138.87 by means of a flash intervention.
Bank of Jamaica introduced a bidding system when they intervene in the foreign exchange market officially called “Foreign Exchange Intervention and Trading Tool (BFXITT).” The system was introduced in 2017 with the central bank buying and selling funds in the market whereby authorized dealers and Cambios had bid for the amounts on offer.
Friday’s intervention was to address temporary demand and supply imbalances in the market Jamaica’s central bank stated. Friday’s intervention is the first being made since the central bank intervened with two flash sales on July 18 and 19th this year with a total sale of US$35 million and prior to, US$30 million on July 11. In 2017 and 2018 the central bank had regular weekly scheduled interventions in the market from August to October and November, but there has been none in 2019 after BOJ lowered the amount dealers had to surrender to the central bank from amounts they bought weekly.
The amount offered for sale on Friday attracted 42 bids amounting to US$72.6 million but just 17 were accepted with the highest bid at $139.15 and the lowest at $137. Bids at $138.65 got 33.33 percent of the amount applied for.
The intervention comes against the background of the country’s Net International Reserves climbing US$162 million, from US$2.936 billion at the end of August to US$ 3.098 billion at the end of September.