BOJ Slashes FX Surrender Value

The Bank of Jamaica (BOJ) is today taking another step to make US dollars more easily available.

Effective today, authorized dealers and cambios will be required to surrender less of their daily foreign exchange purchases to the central bank.

The BOJ announced the change in a statement last night.

They say they expect this will improve the amount of cash available in the foreign exchange market.

Up until today, authorized dealers had to sell 25-percent of their daily foreign exchange purchases to the central bank, in what’s called a “surrender” arrangement.

For cambios, that figure was 20-percent. This is how the BOJ gets the US dollars it needs to hold in reserve. But the central bank has now reduced this amount to 20-percent for dealers and 15-percent for cambios.

The BOJ says the reduction is in conjunction with its Foreign Exchange Intervention and Trading Tool, B-FXITT.

It’s also in keeping with their ongoing reform to make interaction with the foreign exchange market more transparent, market-based and to improve efficiency and transparency.

The bank says it will conduct periodic reviews of market conditions and other factors to determine whether they’ll reduce the surrender requirements even more.

Just yesterday, businessman Omar Azan called on the BOJ to reduce the surrender requirement.

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