The Jamaican dollar money market exhibited another week of moderate liquidity with a total of $90.65 billion in operation last week, as represented by the aggregated current balances held by deposit-taking institutions (DTIs). 

However, the aggregated closing current account balance declined by $31.50 billion, coming from $122.16 billion in the previous week. There was one Bank of Jamaica (BOJ) intervention last week through its B-FXITT arrangement with a total of US$40 million to combat the depreciation of the local currency against its American counterpart in the prior week. 

The demand for money market instruments remains robust, as seen in the recent BOJ 30-Day Certificate of Deposit (CD) auction on August 28, 2024, which was oversubscribed with a bid-to-cover ratio of 1.85x. 

Weighted average yield downward trajectory 

Despite this high demand, the weighted average yield continued its downward trajectory, indicating that investors are taking their cue from the recent reduction in the central bank’s benchmark interest rate.

The average yield for the BOJ’s 30-day competitive price auction dipped to 7.61 per cent, down from last week’s 7.99 per cent and a significant drop from April’s peak of 11.90 per cent and 38 basis points below the yield in the prior week’s auction. The next BOJ 30-day CD auction is scheduled for today September 4, 2024.

In the foreign exchange market the Jamaican dollar gained marginal ground, ending the trading week last week and taking 0.28 per cent less Jamaican dollars to purchase one USD in trading activity. 

The weighted average selling rate for US$1 was J$158.03 last Friday.