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JAM | Jan 23, 2025

JMD money market further reduced

/ Our Today

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Durrant Pate/Contributor

Liquidity in the JMD money market was reduced further last week, marking the third consecutive week of decline since the beginning of 2025. 

As at January 17, the aggregated current balances held by deposit-taking institutions (DTIs) was J$27.59 billion marking a 50% decline from the previous week’s $55.18 billion. Demand for money market instruments remained high, as evidenced by the oversubscription in the Bank of Jamaica’s latest 30-day Certificates of Deposit (CD) Auction. 

The average yield from said auction inched up 19 basis points to 6.59% from 6.40% the previous week. The auction was oversubscribed as total bids amounted to J$37.64 billion relative to the $33 billion issue size, implying a bid-to-offer ratio of 1.14x, similar to the CD auction done in the previous week.

In the foreign exchange market, the Jamaican dollar depreciated slightly (-0.17%) last week with the USD selling rate moving to J$157.49 from J$156.22 last month. The depreciation, though muted, was primarily driven by robust end-user demand for USD in the market. 

Given the strong demand, the Bank of Jamaica (BOJ) intervened in the market with US$40 million last week, through its BFXITT Auction. 

However, the supply intervention was not settled until Monday, January 20, and therefore could provide some support for the foreign exchange rate this week.

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