Remittances on track to exceed US$3.5B

Remittances inflows to Jamaica surged to US$3.18 billion for the first 11 months of 2021 after pulling in US$274.5 million in November, an increase of 15.6 percent or US$37 million over the comparative period in 2020, data out of the Bank of Jamaica shows.
The performance for November puts the total intake for 2021 above the US$2.9 billion hauled in for January to December 2020. The outturn for 2021 seems set to exceed $3.5 billion for the year when the final numbers are tallied for December.
Based on the performance to date and the consistency of the monthly increase the 2021 inflows seem set to exceed by $1.1 billion the inflows of US$2.406 billion the country received in 2019 and just over $600 million more than the total for over 2020.
Data show Jamaica receiving around $2 billion more inflows in the last two years over and above the trend up to 2019. Between 2007 and 2019 inflows grew around US$1 00 million per annum, with no growth in inflows in 2015, 2017 and 2018. The increase in 2020 and 2021 broke the trend of low growth experienced since 2007.
Persons within the financial sector attribute the increased flows to a number of factors including many Jamaica who lives abroad buying real estate and contributing to the building boom in Jamaica others are of the view that the transfer of funds by the government’s fiscal stimulus to individuals, primarily in the United States is also a big contributor.

Jamaica’s NIR jumps $104m in December

One signal of the health of a country’s international trade can be viewed from the performance of its net international reserves, based on this, the Jamaican economy could be in a pretty decent shape.
Jamaica has seen a bounce in remittances in the country climbing from just $2.4 billion in 2019 to $2.9 billion in 2020 and is expected to touch US$3.6 billion last year. In addition, tourism inflows have bounced back well in 2021, with preliminary data indicating that in December last year arrivals could be down 24 percent against that of 2019 before the disruptions in 2020 started, with all of 2021 down 45 percent on 2019. Bank of Jamaica reported that the country’s net international reserves rose US$104 million in December over November 2021 to close the year at $$4 billion and is up from US$3.1 billion at the end of 2020.

Get the most from credit cards

The Christmas season is here and persons will be spending above the normal levels in the earlier part of the year. The use of Credit cards will rise sharply and many will feel the pain of their spending when they face credit card payment in the first two months of 2022, yet there are ways to have your cake and eat it when it comes to the use of credit cards if some simple rules are followed.Stacked Credit Cards Stock Photo - Download Image Now - iStock
Credit cards are extremely useful if managed properly, but the number of Jamaicans with credit cards is relatively small, with just under four hundred thousand according to data from the Bank of Jamaica. The same data shows debit cards numbering 4.34 million. Many persons seem to fear using credit cards that carry extremely high interest rates and penalties for missed payments. A number of persons have gotten into financial difficulties because of how they misuse them or just fail to manage them well.
How many persons know how to use these instruments to their advantage, with the possibility of nearly two months interest free credit.
Individuals should get to know all the terms of each card they hold. These include interest rates applicable, the date that interest will start to accrue if the amounts incurred are not paid within the time frame the statement indicates. Know the dates when statements are cut off as this can allow one to max out on the credit received without incurring charges. Both dates are shown on monthly statements but may vary from one statement to another. While the payment date will vary by a few days from month to month the date statements are printed are usually fixed. This latter date is most important if cardholders are to get the most out of their cards.

NCB Financial Montego Bay branch

Credit cards should be used to avoid paying the prohibited high interest rates. Rule one, do not use the cards unless the user knows where money will come from when the payment is due so it can be paid in full and on time thus avoiding the heavy interest cost.
Do not be lulled into paying just 10 percent per month that the banks entice cardholders to do, if you don’t pay in full when due there will be unnecessary expensive interest charges to bear. Get a regular bank loan instead. Remember that banks loan cost about 80 percent less than credit card interest.
The dates for the statement is of focal point for when the card is to be used. A few days before the cutoff date and the credit received is cut sharply to a few days compared to using them the day after the statements are printed. Where there is more than one card, alternate them to use the one that has the longest time to go before the cut off for printing statements, with the other to be used after the next cut off time. This way users will max out on the credit terms and save cash.

A card cut off for printing is say the 20th of the month, if the card is used on the following day a payment would not be due until the middle of the second month following the use of the card. Say the bank cuts off transactions and prints the statement on December 20 and the cardholder effects a charge on the 21st, payment will not due until mid-February resulting in almost two months of interest free credit. If the cardholder incurred the charge on the 20th, that amount would appear on the next statement normally due for payment by January next year, one full month ahead of a charge that was incurred just one day later.
If persons have the option to put off paying a bill before the statement date or a few days after the statement date such action will afford them one more month of interest free debt.

Jamaica’s remittances up again in October

Add your HTML code here...

Total remittance inflows climbed a respectable 8.8 percent for an increase of US$24 million to US$296 million, up from US$272 million in 2020.
The increase continues the robust growth remittance inflows enjoyed since May last year. It puts the total inflows for the year to date at US44 million short of the total intake for 2020, when US$2.905 billion was taken in for the year to the end of December. At the pace inflows have grown, the take for the current year could hit a record US$3.5 billion, data released by the Bank of Jamaica is suggesting.

Remittances jump 17% in September

Total remittance inflows in Jamaica jumped 17.2 per cent or US$44.8 million in September 2021 over the $260 million inflows for September 2020 and lifting the gross inflows for the year to date to US$2.6 billion, just US$300 million less than US$2.9 billion inflows for the 2020 calendar year.
The increase for the month is highly positive, in light of a strong 34.5 percent jump in September 2020 over the 2019 inflows for that month.
The total inflows for last year could be equalled or exceeded with the October numbers and could put the inflows for the year at US$3.6 billion by the end of the year. The numbers for September continues the robust monthly increase since last year May, except for a small decline of 2.4 percent in August this year. For the January to August 2021 period, remittance inflows to Jamaica grew by 25.4 percent to US2.3 billion, up from US$1.836 billion in 2020. Prior to August, inflows grew by 30.4 percent, with June and July being up 10 percent, well below 42 percent increase to May.

The data was obtained from the Bank of jamaica.

Have Interest rates peaked?

Jamaica’s Central Bank 

Interest rates on Certificate of Deposit issued by Bank of Jamaica seem to be levelling off, with the rate at last week’s auction declining from the previous week’s outturn.
Last week’s offer of $7.5 billion in 30 days on Wednesday, 27 October, attracted 76 applications amounting to $13 billion and resulted in an average yield of 3.96 percent, down from 4.53 percent at the auction in the previous week. Bids were received as low as 2.5 percent covering $1.48 billion, with the highest rate bid being 7.34 percent for $20 million. A bid amounting to $550 million received full allocation at 4.79 percent. The total nominal outstanding amount for the 30-day CDs on the settlement date – 29 October, will be $41.5 billion, down from $46.5 billion in mid-October.

BOJ one year CDs 2.74%

Bank of Jamaica’s one-year CD offering of $4.5 billion on Thursday, October 21, ended with an average interest rate of 2.74 percent, much lower than the 4.53 percent the 30 days CD cleared at this past week.
The one year instrument attracted 107applications amounting to $15.88 billion, of which only 27 were successful. The highest bidding rate was 8.99 percent for $423 million, but the highest successful rate was 4.76 percent, resulting in 29.4 percent of the amount applied for being accepted by the Bank of Jamaica. The highest rate payable on the full amount of $140 million applied for was 4.5 percent, while the lowest rate applied for was 1.495 percent on $400 million.
The issue is likely to be regarded by the country’s central bank as highly successful. The success of the issue should result in more longer term offerings to lock up liquidity in the market on a longer term basis than the 30 days instruments that are more costly for the bank and more challenging to manage as they mature on a more frequent basis.
Jamaica is now seeing rising interest rates following the Central Bank’s decision in August to raise as a result of surging inflation. Following that decision, 30 day CD rates climbed sharply and the Bank raised its Overnight rate from 0.50 percent to 1.5 percent in September.

BOJ now paying more than 4.5% on CDs

Interest rates rose to 4.53 percent in the latest Bank of Jamaica 30 day CD offering of $9.5 billion on Wednesday this week, up from 4.17 percent on Wednesday, October 13 and ended with total CDs outstanding falling by $2 billion to $44.5 billion, but there are signs that rates may be peaking, at least for now.
Signs that the rates may be peaking for a while are visible by the decline in the highest bidding rates and the much larger sum applied for at the minimum rate compared to the previous auction. The highest rate payable on the CDs is 5.5 percent, while the lowest rate applied for was 3.75 percent for $2.5 billion, this contrast with the previous auction in which the lowest bid was just $58 million at 3 percent. The highest submitted bid rate came in at 7 percent and is down from 7.99 percent in the previous auction. The auction attracted $14.74 billion from 42 applications, with 24 being successful.

BOJ now paying over 4% on CDs

Interest rates rose to 4.17 percent in the latest Bank of Jamaica 30 day CD offering of 12 billion on Wednesday last week, up from 3.28 percent on Wednesday, October 6 and well over the new overnight rate of 1.5 percent.
Having settled at a low of just over 0.5 percent for the past two years, the latest rate marks a significant shift in a very short time frame, a development that investors should watch carefully.
At the recent auction, the central bank received 53 bids amounting to $14 billion for $12 billion on offer, 46 bids were successful up to 5.27 percent and came after BOJ increased their overnight rate to 1.5 percent. The total nominal outstanding amount for the 30-day CDs $46.5 billion, similar to the week before, but well above the $35.5 billion at the end of July.
At the same time, the Government of Jamaica Treasury bill auction on Wednesday, October 10, rates on the three tenors on offer ended with an average rate of 2.165 percent for the 90 day offer that attracted $2.246 billion for the $700 million on offer. The 181 days offer saw $1.974 billion chasing the $700 million offered and resulted in an average rate of 2.75 percent and the 273 days T-bill pulled in $1.865 billion for $800 million offered and resulted in an average rate of 3.69 percent.
The range for yields for full allotment is 1.45 percent to 2.85 percent for the 91 day T-Bill, 1.5 percent to 3.05 percent or the 182 days T-bill and 2.41 percent to 4.75 percent for the longest dated bill.
On Thursday, October 21, the central bank will auction $4.5 billion 365 days Certificate of deposit.

More interest rate increase

Bank of Jamaica focus is not on the naysayers about its recent move on interest rates that saw the central bank hike overnight policy rate by 100 basis points to 1.5 percent as the average rate on their latest Certificate of Deposit that was offered on Wednesday, October 6, cleared at 3.28 percent up from 2.59 percent at the previous auction a week before.
At the latest auction last week, the central bank received 82 bids amounting to $18.5 billion for $12.5 billion on offer. A total of 51 bids were successful up to 4.25 percent and comes after BOJ increased the overnight rate.
The total nominal outstanding amount for the 30-day CDs on the settlement date of October 8 will be $46.5 billion, up from $45.5 million the week before. Since the start of August, the central bank CDS have pulled in an additional $11.5 billion by increasing the amount in the market from $35 billion.