Tue | May 21, 2019

BOJ sells US$40 million to forex market

Published:Thursday | April 18, 2019 | 1:50 PM

Bank of Jamaica (BOJ) is reporting that it sold a total of US$40 million over the past two days to the foreign exchange market to help ease the fall in value of the Jamaican dollar against the US dollar.

The BOJ says US$20 million was sold to authorised dealers and large cambios yesterday and a similar amount today through it's Foreign Exchange Intervention and Trading Tool (B-FXITT).

The central bank says the interventions are intended to address temporary demand and supply imbalances that exist in the market.

Yesterday, the opposition raised concerns about the sharp devaluation of the local currency.  

According to the opposition, the Jamaican dollar has fallen rapidly this month, moving from J$125.60 to US$1 on April 1, 2019, to $133.79/US$1 on April 16, 2019, representing a fall in value of 6.5% in 16 days.

It argued that this bad for businesses and consumers.

The central bank is encouraging businesses to utilise forward contracts with their financial institutions to minimise the risks that are associated with their foreign exchange obligations.

This, the BOJ says, is particularly relevant in an environment where the exchange rate moves in both directions.

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