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BOJ continues to chase Jamaican dollars
2013-06-12 11:23:27 | (0 Comments)
The Bank of Jamaica will be offering another two variable rate Certificates of Deposit aimed at taking cash out of the system.
The CDs are special issues available for subscription from June 12 to June 18, at rates that are more than a percentage point above the regular CD issued by BOJ.
The offers are being used as tools by the central bank as an alternative to investors with cash that would otherwise be invested in the foreign exchange market, thereby taking downward pressure off the local currency.
However, the JMD ploughed through the psychological barrier of J$100 per share last Friday, June 7. It traded at J$100.30 against the USD on Wednesday.
BOJ says it aims to raise J$3 billion from a 183-day CD priced initially at 6.77 per cent for the first quarter and thereafter at the three-month treasury plus a reset price of 0.15 per cent.
For the other CD, a one-year issue, the BOJ has set no limits on the funds to be raised from the offer. The initial coupon rate is 6.85 per cent payable in the first quarter. The reset price in the following periods will be 0.23 per cent above the three-month treasury rate.
The offers are open to BOJís licensed primary dealers and commercial banks.
The central bank said it would continue to offer its regular 30-day CD at the current rate of 5.75 per cent.
The BOJ has already placed seven special variable rates CDs since April -- the current issues will bring the placements to nine year to date -- as well as a fixed rate USD-indexed bond under its liquidity management programme.
Source: The Gleaner/Power 106 News
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