JMD dollar depreciated slightly even with US$90m intervention

Durrant Pate/Contributor

There was a tempering of liquidity in the JMD money market last week, as measured by the aggregated current balances held by Deposit-Taking Institutions (DTIs). 

As at February 7, 2025, the total aggregate current balance amounted to J$43.87 billion, marking a 17.9% decline compared to the previous week. Demand for money market instruments remains high, as evidenced by the oversubscription in the Bank of Jamaica’s (BOJ) latest 30-day Certificate of Deposit (CD) Auctions with yields also rising marginally. 

The average yield from the 30-day CD Auction inched up to 6.02% from 5.99% the previous week. Total bids amounted to J$62.03 billion relative to the $46.00 billion issue size, implying a bid-to-offer ratio of 1.35x, compared to 1.60x the previous week. 

The lower ratio last week was largely due to a 17.9% week-on-week increase in the offer size, which rose from J$39.00 billion the prior week. The next auction date for the Bank of Jamaica 30-day CD was Wednesday, February 12. 

The Government of Jamaica’s (GOJ) most recent issuance of its 91-day, 182-day, and 273-day Treasury Bills (T-bills) to finance its budgetary requirements, was also oversubscribed. The average yields for the respective tenors were 5.87729%, 5.87177%, and 5.88273%. 

The next auction of Government of Jamaica Treasury Bills is scheduled for Tuesday, March 4, 2025.

FX market operations

Turning to the foreign exchange market…The Jamaican dollar depreciated slightly against the US dollar (USD) with the USD selling rate moving from J$157.44 to J$157.63 last Friday’s close. The depreciation, though muted, reflects robust end-user demand for USD in the market, which was met with some Bank of Jamaica (BOJ) interventions. 

The BOJ intervened in the market with a total of US$90 million on February 5th, 6th and 7th, 2025, through its B-FXITT Programme. The supply intervention on the 7th (US$30 million was settled on Monday, February 10th and therefore could provide some support for the foreign exchange rate this week.