The Central Bank has been proactive in preserving financial sector stability against the impact of the coronavirus (COVID-19) pandemic, with $76 billion pumped into the local market.
Bank of Jamaica (BOJ) Governor, Richard Byles, said that the liquidity support, which represents four per cent of gross domestic product (GDP), has been provided through a special bond-buying programme, reduction in the cash reserve requirement, and special bond repurchase facilities, among others.
He was speaking during the Central Bank’s quarterly briefing at the BOJ in downtown Kingston on Thursday (November 19).
Additionally, he said the BOJ has implemented several initiatives aimed at providing liquidity to and ensuring the continued smooth functioning of the foreign exchange market.
“We introduced foreign exchange (FX) swap arrangements, conducted B-FXITT [BOJ-FX Intervention Trading Tool] intervention sales, directly sold foreign exchange to major players in the energy sector, reduced the foreign currency cash reserve requirement and provided a US-dollar bond repurchase facility,” the Governor further informed.
Mr. Byles told journalists that the liquidity provided to the system via these sources, since March, exceeds US$1 billion.
He also indicated that the BOJ offered US dollar-indexed bonds to investors seeking a hedge against exchange rate movements.
“The Bank’s combined liquidity support in Jamaican and US dollars is substantial and unprecedented, [and] equivalent to more than 11 per cent of GDP,” Mr. Byles said.