Durrant Pate/Contributor

The Government of Jamaica (GOJ) goes to the local capital market for J$2.2 billion to finance its budgetary requirements through its latest Treasury Bills (T-bills) auction set for Wednesday (July 9).

The auction will be for three tenors with an offer size of J$700-million for the 91-day and 182-day tenors, respectively, and a 273-day offering of J$800-million with a settlement date for all three tenors of July 11. In the meantime, liquidity in the JMD money market, as measured by the aggregated current balances held by deposit-taking institutions (DTIs) fell to J$21.58 billion last week.

This reflects a 57.5 per cent reduction week over week. Demand for money market instruments remains solid, evidenced by the oversubscription in last week’s Bank of Jamaica (BOJ) 30-day Certificate of Deposit (CD) Auction results. 

Total bids on the 30-day CD auction amounted to J$43.99 billion, relative to the offer size of J$42.0Bn. Reflecting the sustained demand, the average yield inched up 12 basis points (bps) week-over-week to 5.98. 

The next auction is scheduled for tomorrow. There was also a 14-day repurchase operation with deposit-taking institutions for the provision of Jamaican dollar liquidity for J$1 billion. 

FX market operations

The auction was oversubscribed with J$2 billion total bids and an average yield of 6.115 per cent. In the foreign exchange market, the Jamaican dollar appreciated slightly in trading last week. 

On July 4, it took $0.05 less JMD to purchase one US dollar than at the close of trading on June 27th. The slight strengthening of the JMD was supported by strong interdealer activity following the Bank of Jamaica’s (BOJ’s) US$110 million intervention in the market via its B-FXITT programme, between June 27 and July 1.