While the Bank of Jamaica (BOJ) assured the public recently that current holdings of the Jamaica dollar liquid balances by the banking system are adequate for immediate needs, it is further advising financial institutions that it will facilitate expanded access to both foreign currency and Jamaica dollar liquidity through various channels, throughout the coronavirus (COVID-19) pandemic.
• removing the current limits on the amounts that deposit-taking institutions (DTIs) borrow overnight without being charged a penal rate.
Overnight liquidity support will be made available at the prevailing rate of 2.5 per cent, limited only by collateral;
• the re-introduction of a facility whereby the central bank can make Jamaica dollar liquidity available to DTIs for periods up to six months.
These lending arrangements can be backed by GOJ and BOJ securities.
“With the sharp contraction in the tourism industry and the likely disruption to remittance inflows, the supply of foreign exchange to the market will fall in the near term. The central bank will support the foreign exchange needs of businesses in the real sector through sales to authorised dealers and cambios, as needed,” the central bank stated.