Demand for money market instruments was strong in Jamaica’s capital market last week, evidenced by the oversubscription of the Bank of Jamaica’s (BOJ’s) weekly 30-day Certificate of Deposit (CD) Auctions as well as the BOJ’s Treasury-bill (T-bill) offering. 

The average yield on the 30-day CD Auction continued to climb, closing at 5.72 per cent from 5.58 per cent in the previous week. Total bids received amounted to J$50.04 billion relative to the offer size of J$27.0 billion, implying a bid-to-offer ratio of 1.79x. 

The previous week’s lower ratio of 1.49x was due to its higher offer amount of J$42.0 billion. The results of last week’s T-bill auction continued to reflect strong demand for money market instruments. 

Both the 91-day and 182-day tenors, each offering J$700.0 million, recorded robust bid-to-offer ratios of 5.24x and 5.59x, respectively. In the meantime, liquidity in the Jamaican dollar money market went down last week, as measured by the aggregated current balances held by Deposit Taking Institutions. 

The total aggregate current balance then amounted to J$64.62, marking a 7.91 per cent decrease compared to the previous week. In the foreign exchange market, the Jamaican dollar remained relatively flat against the US dollar, with the USD selling rate going down slightly last week from J$158.64 to J$158.53. 

This was due to the BOJ’s intervention in the market, where it sold US$90 million to counter the strong demand for the US dollar by end users at around JMD$157/USD$1.