Both Jamaican and American dollar liquidity continues to increase week-over-week. 

Broker market demand for USD last week rose for longer-tenured funds; similarly, demand for JMD remained high, as brokers are trying to replenish their liquidity level that would have declined from the encashments experienced in the tax season. 

There were no Bank of Jamaica (BOJ) interventions in the foreign exchange market via B-FXITT last week. Demand for money market instruments was relatively low with the last week’s BOJ auction being undersubscribed. 

Bids received totalled J$41.7 billion relative to the offer size of J$49.5 billion. The average yield from the 30-day auction rose to 11.59 per cent, 46 basis points higher than the prior week. This implies a bid-to-cover ratio of just 0.84. 

The highest bid rate for full allocation was 14.29 per cent, which increased from 11.99 per cent, in the prior week. In the foreign exchange market last week, the Jamaican dollar depreciated by 0.54 per cent relative to the USD, week over week with the USD selling rate moving from J$154.70 on March 28, 2024, to J$153.53 on April 4, 2024. 

The depreciation was primarily due to the resumption of normal end-user demand particularly from commercial customers, who in the previous weeks would have had stronger demand for JMD to fulfil their tax obligations.