JAM | Jun 22, 2023

Lowest level of J$ liquidity since start of 2023

/ Our Today

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Jamaica’s polymer banknotes, which went into domestic circulation on June 15, 2023. (Photo: Bank of Jamaica)

Jamaican dollar liquidity in the local capital market is now at its lowest since the beginning of the year.

JMD liquidity dipped even further last week with a total of J$7.1 billion in the market, as represented by the Bank of Jamaica’s (BOJ) aggregated current balances, down J$1.4 billion from J$8.5 billion week-over-week. Of note is the fact that while there were no BOJ interventions in the foreign exchange market via B-FXITT last week, JMD liquidity levels continue to decline in the market.

This has come about as brokers are still recovering from the previous capital auction bids, and there has been a decrease in client placements across the broad. Consequently, broker demand for JMD increased, particularly for short-term funds.

However, rates in the retail market have remained consistent. The average yield from the BOJ’s competitive price auction increased to 9.40 per cent versus 9.30 per cent in the prior week.

The auction was oversubscribed with bids received totaled J$30.05 billion relative to the offer size of J$23 billion. The bid-cover ratio increased to 1.306 relative to a ratio of 0.968 in the prior week.

The highest bid rate for full allocation was 10.99 per cent which decreased from 13.99 per cent in the prior week.


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