Durrant Pate/Contributor

Jamaican dollar (JMD) liquidity in the local money mark continues its upward movement, increasing for a second consecutive week.

At the same time, the American dollar (USD) money market liquidity continued to fluctuate. As of the end of September, a total of J$37.10 billion was in the market, as represented by the Bank of Jamaica’s (BOJ’s) aggregated current balances.

The aggregated closing current account balance increased by J$10.42 billion from J$26.68B billion week- over-week. Last week, there was one BOJ intervention via B-FXITT in the foreign currency market.

A total of J$3.45 billion was contracted through the sale of US$30 million to the market. Despite this contraction, the demand for Jamaican dollar to meet payroll obligations, due at the month’s end, influenced the week-over-week increase.

As it relates to broker demand, JMD remained relatively moderate, particularly for short-term funds, while demand for USD continued to increase for longer-tenured funds. Rates in the retail market have also stayed consistent on JMD placements.

The BOJ held a 30-day competitive price auction for which the average yield decreased to 9.22 per cent.

FX market operations

In the foreign exchange (FX) market, the JMD depreciated by 0.04 per cent relative to the USD week-over-week. The USD selling rate moved from J$155.42 to J$155.48 last week. The JMD depreciation was fuelled by increased end-user demand for US currencies from corporates to settle end-of-month obligations.

However, the depreciation was curtailed by BOJ’s intervention into the FX market last week via the B-FXITT tool, with a total of US$30 million last Friday, September 29.