#Kingston, November 25, 2019 – Jamaica – Bank
of Jamaica (BOJ) Governor, Richard Byles, says the sale of US$140 million to
the foreign exchange market has served to satisfy extraordinary currency demand,
which surfaced in recent weeks. The
spike was related to demand for portfolio transactions and seasonal restocking
by retailers ahead of the Christmas period.
Speaking
at the BOJ’s quarterly briefing on Thursday (November 21), Mr. Byles said this
spurred a 5.2 per cent (J$7.07) depreciation in the value of the dollar between
October 1 and November 12, “despite normal daily inflows”.
Additionally,
he said it reversed the 1.8 per cent appreciation that occurred in September,
“and erased the sense of normal two-way movement in the exchange rate that had
been evident for an extended period prior to October 2019”.
“Public
concern was amplified by the weighted average selling exchange rate breaching
the psychological threshold of J$140 at the end of October 2019,” the Governor
further stated.
However,
Mr. Byles said consequent on the BOJ’s sale of the US$140 million, via five BOJ
Foreign Exchange Intervention and Trading Tool (B-FXITT) flash sale operations
to authorised dealers and cambios, “we have observed that the exchange rate has
adopted an appreciating trend since November 13”.
Meanwhile,
the Governor said that in its latest intervention of US$20 million on November
14, the Central Bank amended its rules to stipulate that all the funds be
resold to end users – non-financial institutions that are funding obligations
for goods and services acquired.
“The Bank felt that this requirement was necessary
as the larger part of the previous intervention funds had not reached end users.
So, it’s a good method to use at
a particular point in time, but it’s not [one] that we want to continue to use.
In any event, we don’t want to continue to have to sell into the market; rather
only when we feel it is acting erratically or irrationally,” Mr. Byles
pointed out.
Contact: Douglas McIntosh
Release: JIS
Photo Caption: Bank of Jamaica (BOJ) Governor, Richard Byles, addresses journalists during Thursday’s (November 21) quarterly briefing at the BOJ in downtown Kingston.
Yhomo Hutchinson Photo