After three consecutive weeks of increases, money market yields declined last week on the Bank of Jamaica’s (BOJ) 30-day certificate of deposit (CD) auctions. 

The average yield on the 30-day CD auction fell to 5.89 per cent from 6.22 per cent the previous week. Bids totalled J$26.94 billion relative to the J$14.00 billion issue size, implying a bid-to-offer ratio of 1.93x. Furthermore, the previous week’s 0.92x bid-to-offer was lower, primarily driven by the higher offer size of J$40.00 billion. 

This week’s auction was for a total of J$2.2 billion in treasury bills (T-bills) to finance its budgetary requirements. There were tenors for 91-day,182-day and 273-day. Both the 91-day and 182-day tenors with an offer size of J$700 million, while the 273-day tenor accounts for the balance. The subscription date for the auction was Wednesday, with settlement on Friday, October 10.

Liquidity in the domestic money market declined, as measured by the aggregated current balances held by deposit-taking institutions (DTIs). As at October 3, the total aggregate current balance amounted to J$65.66 billion, marking a 6.6 per cent decline compared to the previous week. 

In the foreign exchange market last week, the Jamaican dollar depreciated slightly (-0.05 per cent), with the US dollar selling rate moving from J$161.26 to J$161.34.

Despite ongoing FX depreciation, the Jamaican dollar remains below $161.50, where strong price resistance from participants has so far capped depreciation beyond this level.