US$ money market remains stable and moderately liquid

Durrant Pate/Contributor

The Jamaican dollar appreciated by 0.12 per cent relative to the US dollar week over week with the ‘greenback’ selling rate moving from J$154.52 on December 2, 2022 to J$154.34 on December 9, 2022.

This appreciation reflects price resistance from end users as they demand a lower price from sellers of the American currency. The US dollar money market remains stable and moderately liquid.

Broker market demand for American dollar remains at 30-days and longer-tenured funds with some brokers offering as high as 5.50 per cent for one year to clients.

As for the Jamaican dollar money market, as at December 8, 2022, a total of J$15.24 billion was in the market as represented by the Bank of Jamaica’s aggregated current balances. The aggregated closing current account balance declined by J$6.1 billion from J$21.3 billion on December 1.

Jamaican dollar liquidity remains tight, leading to further high levels of competition for cash by market players. As a result, rates are expected to remain elevated.

NCB Capital Market is reporting that market players were mainly square last week with only overnight lending.