The Bank of Jamaica (BOJ) will commence selling foreign exchange (FX) to Authorized Dealers (ADs) and eligible cambios via a competitive bidding process, effective July 26.
The introduction of this new framework will follow a pilot exercise on Wednesday.
Under this process, the BOJ Foreign Exchange Intervention & Trading Tool (B-FXITT), BOJ will pre-announce, up to four weeks ahead, the quantity of FX that it intends to sell to the market on Wednesday of each week.
All authorised dealers and eligible cambios will be invited to submit bids to purchase FX from Bank of Jamaica at exchange rates that they specify. The Bank will publish a report from each operation on the same day, including the weighted average exchange rate arising from the operation, and will also introduce the publication of midday weighted average exchange rates.
The Bank may also sell foreign exchange to authorised dealers and eligible cambios outside of this weekly schedule if circumstances merit.
The implementation of this upgrade to the Bank’s operations forms a part of Bank of Jamaica’s ongoing effort to enhance the effectiveness of its monetary policy transmission and foreign exchange operations.
The introduction of B-FXITT will not affect the manner or freedom with which members of the public currently purchase or sell foreign exchange from or to their banks and cambios.
Article compliments LOOP News Barbados.