Interest rates on money market operations climbing

Durrant Pate/Contributor

There was a further contraction in Jamaica’s money market last week, resulting in interest rates on market instruments rising.

As of last week, a total of J$19.35 billion was in the market, as represented by the Bank of Jamaica’s (BOJ’s) aggregated current balances. This is down by J$9.8 billion from J$29.1 billion recorded week over week. 

The average yield from the BOJ’s competitive price auction last week increased again moving to 8.41 per cent coming from 8.24 per cent in the prior week. The auction was oversubscribed, as bids received totalled J$38.9 million relative to the offer size of J$34 billion.

This reflected a bid-cover ratio of 1.1441. The highest bid rate for full allocation was 9.99 per cent, which is a decrease from 10.50 per cent in the prior week. 

Yesterday, the BOJ came to the market with a 30-day Certificate of Deposits while the Government of Jamaica tapped the market at the same time with a tender offer for a total of j$1.4 billion in Treasury bills. 

The tenors for the offers are 91 and 182 days, both having an offer size of J$700 million. The subscription date for the auction was yesterday and will settle tomorrow June 9.