Jamaica’s FX inflows surpass 2020 flows

There is a sharp surge in the earnings of foreign exchange in the first two months of this year and the first week of March for Jamaica over the similar period despite the impact that the Covid pandemic has had on business in the country and, in particular the tourism industry.
Data out of Bank of Jamaica shows purchasing by Authorized dealers and Cambios for the year to March 4 amounts to $777 million US$103 million more than in 2020, while selling was just $33 million more in 2021 than in 2020. This development is a huge revelation with the tourism sector, a large foreign exchange sector operating around a third of capacity compared to a full capacity for the similar period last year.
Trading for last week’s Friday resulted in purchases of US$38.5 million and selling of US$60 million against 2020 purchases on the same day of $34.5 million and sales at $47.7 million in all currencies. On Thursday, purchases totalled US$63,861,970 and sales US$59,145,237, well ahead of the same day in 2020.
On Wednesday, purchases amounted to US$54,236,293 and sales US$63,794,632, with the amounts purchased being well ahead of last year’s figure but with sales just $2 million less than last year. Tuesday’s purchases amounted to US$62,667,923, with sales of US$71,359,269, both being much higher than for the similar day in 2020. On Monday, US$67,469,686 were purchased while US$61,868,091 were sold, falling below the 2020 trades.
Last year, trading on the first Monday in March brought in US$73,900,712 while selling amounted to US$73,904,949. Tuesday’s purchases amounted to US$44,971,292 and selling US$65,382,991, while on Wednesday purchases were US$55,679,393 and sales US$79,738,789 and on Thursday, March 5 last year, dealers purchased US$53,369,689 from the system and sold US$47,373,166.
Financial institutions have been selling US dollar short as demand weakens and the rate is appreciating. Monday last week saw just US$2.5 million sold in excess of purchases, but National Commercial Bank went short by nearly US$7 million and JMMB Bank by $3 million. Traders went short on Tuesday to the tune of US$15 million with NCB, the major short seller with US$9 million and BNS, FCIB, JMMB Bank, Sagicor and VMBS, making up the bulk of the rest.

NCB is a big player in the FX market.

On Wednesday, net selling amounted to just over US$12 million, with the big net sellers being First Caribbean International Bank, First Global Bank, JMMB Bank, NCB and Sagicor Bank.
On Thursday, there were no overall net sales as purchases exceeded sales, but Scotia Bank, JN Bank and Sagicor Bank sold more than they bought on that day.
One usually reliable and knowledgeable source indicates that from where he sits, “increased inflows are coming from remittances, entities selling US dollars to pay taxes, increased BPO flows and from some exporters”. The high level of short selling is based on demand being soft currently as financial institutions take advantage of the higher rate that the Jamaican dollar sits at. Others are confirming increased flows from the BPO sector that has grown over 2020, increased remittances and exports. Additional flows may be coming from entities or individuals who bought last year in anticipation of the local dollar running away but may have decided to cash in with the price peaking around the $150 million mark.
On Monday, March 8, dealers bought a total of US$43.3 million in all currencies and sold US$59 million, with short selling of US dollars amounting to $20 million and the selling rate for the US dollar ending at J$148.97. The major short-sellers are BNS, US$3 million, Citibank, US$7.6 million, JMMB Bank, US$2.5 million, JN Bank US$US$2.3 million and Victoria Mutual, US$1.8 million.

More gains likely for Jamaican Dollar

The Jamaican dollar hit a low of $151.27 against the US dollar in August and has rebounded since to trade at $145.3 on Wednesday with one technical indicator showing that it could appreciate further.
The local currency has been on an upward rise since December 2018 as it meanders slowly upwards to hit the low point in August. At the low, traders pushed it beyond the channel top, after moving within the channel as depicted by the yellow lines. It could return to the support line at around $138 later in the year but it could face resistance at the $144 region that it is within reach of currently.
In Wednesday’s trading, dealers sold $64.8 million at $145.306 having bought US$55.8 million at an average rate of $144.43.  In trading, Scotia Bank bought US$8.5 million more than they sold. First Global, JMMB Bank, National Commercial Bank and Victoria Mutual Building Society sold far more US dollars than the bought.

Jamaican$ improved value

The Jamaican dollar closed trading on Tuesday at $145.91 to one US dollar, with dealers selling US$60 million after buying US$51.4 million at an average rate of $144.81. The improved value for the local currency compares with the August 19 low of $151.27 for each US dollar.
On Monday, dealers sold US$36.5 million at an average of $146.89, while dealers bought just US$23.2 million, at an average rate of $144.02.
The big sellers on Tuesday were Bank of Nova Scotia, US$9.6 million at an average of $147.23 after buying a mere US$2.3 million at $142.04. JN Bank bought just $336,000 at $138.16 each and sold US$4.4 million at $142.14 each and National Commercial Bank bought US$6.5 million at an average of $144.79 and sold US$14.4 million at $145.42. JMMB Bank bought US$8.7 million at $143.34 and sold only US$688,334 at $146.19 while JMMB Securities bought US$6.4 million at $146.72 each and sold US$7 million at $146.99.

Jamaican dollar makes more gains

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NCB had the highest net sale of US$ on Friday

The rate of exchange for the United States and Jamaican dollar inched further in favour of the local currency on Friday as dealers sold US$42.2 million at an average rate of $127.99 on Friday, down from an average of 128.126 with the sale of $67 million on Thursday.
On Friday, dealers bought US$37.38 million at an average of $126.74, a decline from $127.38 with the buying of US$61 million on Thursday.
Dealers bought $45,56 million in all currencies on Friday and sold US$50.28 million compared to purchases of US$77.6 million and sale of US$82.5 million on Thursday. Thursday’s trading includes the buying of Can$19.7 million and sale of Can$19.4 million.
Major net sellers of US dollars on Thursday are, Citibank with the purchase of US$160,000 and sale of US$1.65 million, First Global Bank buying US$271,000 and selling US$1.96 million. JMMB Bank ended with the buying of US$839,000 and selling $3.6 million, JN Bank purchased $868,000 and sold $2.48 million, Victoria Mutual Building Society bought $720,000 and sold of $2.45 million but First Caribbean purchased $5.6 million and sold just $1.38 million.
On Friday, Bank of Nova Scotia purchased $9.2 million and sold just $5 million, First Caribbean Bank bought US$813,000 and sold US$1.3 million, JMMB Bank ended buying US$1.87 million and sold $4.8 million, JN Bank purchased $1.16 million with sales of $1.87 million. National Commercial bought US$3.56 million and sold $8.5 million, Sagicor Bank bought $852,000 while selling US$1.99, Victoria Mutual Building Society purchased $693,000 and sold $1.3 million but Citibank purchased US$1.7 million and sold just US$587,000.