The Bank of Jamaica (BOJ) on Thursday (November 14) released an additional US$20 million for sale to authorised dealers and large cambios via the BOJ’s Foreign Exchange Intervention and Trading Tool (B-FXITT).
The provision represented the third consecutive day that the central bank was intervening in the foreign exchange market.
It followed cumulative provisions of US$70 million on Tuesday (November 12) and Wednesday (November 13), in response to recent fluctuations in the value of the Jamaica dollar against the US dollar, and public concern about the depreciation in the exchange rate.
In a statement, the Bank said authorised dealers and large cambios were required to “resell all the funds [from Thursday’s intervention] to end users”.
The BOJ explained that these end users are “non-financial commercial entities that are funding obligations for goods and services acquired”.
In a statement on Tuesday, the BOJ attributed exchange rate fluctuations to increased demand for foreign currency “due to regular restocking by retailers for Christmas”.
Additionally, the Central Bank said there has been “extraordinary demand” relating to portfolio transactions.
The BOJ’s statement on Thursday pointed out that the stipulated sale of the additional US$20 million to end users “is not new… and actually existed prior to December 2014”.
“It has become necessary to reinstate it at this time as the larger part of BOJ interventions over the past two days has not been reaching end users due to the unusually large demand to finance foreign currency investments,” the Bank added.
The BOJ reiterated that “these interventions are intended to address temporary demand and supply imbalances in the market”.