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  • The reduction in the foreign currency cash reserve requirement will return approximately US$65.0 million to DTIs and thereby expand the volume of foreign exchange available to them. In addition, the reduction in the domestic currency cash reserve requirement will release approximately J$14 billion to DTIs.
  • The foreign currency cash reserve was last adjusted in April 2017 when it was increased to fifteen per cent (15%) from fourteen per cent (14%). The reduction in the domestic currency cash reserve requirement completes the series of reductions that the Bank initiated in 2019 to take it to the statutory minimum of five per cent (5%) of prescribed liabilities.
  • Liquid asset requirements will also fall as a consequence of the reduction in the cash reserve requirement. The foreign currency liquid asset requirement will fall to twenty-seven per cent (27%) while the reduction in the domestic currency cash reserve requirement will cause the overall domestic currency liquid asset requirement to fall to

Bank of Jamaica has reduced the cash reserve requirements of deposit-taking institutions (DTIs) by two percentage points, effective 15 May 2020.

The foreign currency cash reserve requirement has been reduced to thirteen per cent (13%) while the domestic currency cash reserve requirement has been reduced to five per cent (5%).

These reserve requirements are the amount of money that DTIs are required to hold at Bank of Jamaica against prescribed liabilities. Both adjustments are therefore aimed at boosting liquidity levels in the financial system in the context of the strain caused by the impact of COVID-19.

The reduction in the foreign currency cash reserve requirement will return approximately US$65.0 million to DTIs and thereby expand the volume of foreign exchange available to them. In addition, the reduction in the domestic currency cash reserve requirement will release approximately J$14 billion to DTIs.

The foreign currency cash reserve was last adjusted in April 2017 when it was increased to fifteen per cent (15%) from fourteen per cent (14%). The reduction in the domestic currency cash reserve requirement completes the series of reductions that the Bank initiated in 2019 to take it to the statutory minimum of five per cent (5%) of prescribed liabilities.

Liquid asset requirements will also fall as a consequence of the reduction in the cash reserve requirement. The foreign currency liquid asset requirement will fall to twenty-seven per cent (27%) while the reduction in the domestic currency cash reserve requirement will cause the overall domestic currency liquid asset requirement to fall to
nineteen per cent (19%).

No interest is paid on cash reserves.

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