The Bank of Jamaica (BOJ) on Friday pumped USD$40-million into the foreign exchange market in a flash auction, as the Jamaican dollar opened trading at an all-time low against the US.
The local currency is now just 4-cents away from selling for an average JMD$138.00 to USD$1.
Today’s flash sale is in addition to 60-million US dollars the bank is selling over a five week period. It’s believed this is an attempt to slow the continued slide of the Jamaican dollar.
The current period of depreciation is the longest and fastest slide of the Jamaican dollar, since it started moving both up and down about a year and a half ago.
It’s depreciated about 10-percent in fifteen weeks, stoking fears that the change might be permanent.
The central bank governor says while he’s concerned about those fears, they’re not justified, as the BOJ has the resources to meet the market’s demand for US dollars.
He says they’re selling USD$60-million over five weeks.
Meanwhile, Governor Wynter is responding to criticism that the BOJ took too long to start selling US dollars.
He says the decision to sell was announced weeks ago, as part of the bank’s Foreign Exchange Intervention and Trading Tool, BFXITT.
He says they’re also able to make changes to the schedule under BFXITT if they notice the demand for foreign currency is changing.
This includes flash auctions like today’s $40-million offer.