Durrant Pate/Contributor

The Jamaican dollar appreciated slightly against the American dollar with the ‘greenback’ selling rate moving from J$158.15 to J$157.33 last Friday. 

The appreciation in the JMD was supported by higher American dollar liquidity in the market, along with end-users’ unwillingness to purchase foreign currency at rates above J$159, forcing the market to offer currency at lower rates. Liquidity in the JMD money market decreased, as measured by the aggregated current balances held by Deposit Taking Institutions (DTIs). 

As at last week, the total aggregate current balance amounted to J$58.25 billion, marking a 4.65% contraction compared to the previous week. Demand for money market instruments was strong, as evidenced by the oversubscription in the Bank of Jamaica’s (BOJ) latest 30-day Certificate of Deposit (CD) auctions. 

The average yield on the 30-day CD Auction inched up to 5.98% from 5.77% the previous week. Total bids amounted to J$40.61 billion relative to the J$36 billion issue size, implying a bid-to-offer ratio of 1.13x, compared to 5.14x the previous week. 

The lower ratio last week was largely due to a 554.6% week-on-week increase in the offer size, which rose from J$5.5 billion the prior week. The next auction date for the BOJ’s 30-day CD was March 6. 

Additionally, the Government of Jamaica’s (GOJ) most recent issuance of its Fixed Rate 9.625% 2031 Note, 7.50% 2035 Note, and 11.25% 2046 Note to finance its budgetary requirements, were all oversubscribed. 

The average yields for the respective tenors were 6.36577%, 6.32106%, and 7.58566%.