Durrant Pate/Contributor

The greenback money market liquidity continued to fluctuate last week, while there was a contraction in Jamaican dollar money market liquidity.

This resulted in the total cash of both USD and JMD in the money market contracting to J$23.52 billion, as represented by the Bank of Jamaica (BOJ) aggregated current balances. The aggregated closing current account balance declined by J$16.67 billion, down from J$40.19 billion posted in the prior week. 

The contraction in JMD was due to salaries being paid out. On the demand side, broker demand, the JMD remained relatively moderate particularly for short-term funds while broker market demand for USD continued to increase for longer-tenured funds. 

NCB Capital Markets reports that demand for money market instruments remains high with investors oversubscribing the recent BOJ and Government of Jamaica (GOJ) issues. The average yield from the BOJ’s 30-day competitive price auction inched up 4 basis points to 10.02 per cent versus 9.98 per cent in the prior week. 

Bids received totalled J$44.2 billion relative to the offer size of J$38 billion, resulting in a bid-to-cover ratio of 1.19. The highest bid rate for full allocation was 10.30%, which dipped slightly from 10.349% in the prior week. 

The BOJ reopened its 25-month 8.5 per cent Certificate of Deposit (CD) maturing June 2026. The average yield for this auction was 9.21 per cent. The auction was oversubscribed with bids totaling J$28.4 billion relative to the offered size of J$18 billion with the highest bid for full allocation being 9.69 per ent. 

Additionally, the GOJ 91-day and 182-day T-Bill auctions were oversubscribed with both having an offer size of J$700 million bids received amounted to J$2.5 billion and J$2.01 billion, respectively. The 91-day and 182-day auctions had an average yield of 8.23 and 8.43 per cent, respectively.