The Bank of Jamaica has reopened subscription to its 6.77% variable rate Certificate of Deposit (CD) and has placed a new one-year CD on the market, amid signs that the foreign-exchange rate is holding steady above J$101 to the US dollar.
The reopened CD is being offered at its original rate of 6.77 per cent per annum on the first quarterly payment due September 12, and thereafter interest will be paid at the three-month treasury bill rate plus 0.15 per cent (WATBY+0.15%).
The instrument matures on December 12, 2013. BOJ aims to raise J$2 billion from the placement.
The 365-day CD is being offered at the kick-off rate of 6.99 per cent, and interest will be paid at three-month WATBY+0.23% until maturity in July 2014. The central bank has set no limits for fundraising under this instrument. Subscriptions to both CDs close on Thursday, July 4. Only the Central Bank's primary dealers and commercial banks are eligible to take up the offer.
The BOJ has been issuing a series of debt instruments to attract investment dollars that would otherwise be spent on the acquisition of US dollars.
The Jamaican dollar peaked at US$101.61 on June 18. It traded at J$101.34 on Monday.
The instruments do not supplant the regular 5.75% 30-day CD, which the BOJ says remains on offer.