Temporary Lending Facility Outcome of Special Team to Monitor Global Financial Crisis

The Bank of Jamaica’s (BoJ) decision to offer a temporary lending facility to domestic financial institutions was one of the first outcomes of the special team established by Prime Minister Bruce Golding, to monitor the global financial crisis and its immediate and longer-term implications for the Jamaican economy.
The team, comprising representatives of Jamaica’s main monetary and fiscal authorities, met twice during the week, the first chaired by the Prime Minister on Monday (October 13), while Wednesday’s (October 15) meeting was chaired by Finance and Public Service Minister, Audley Shaw.
Technical Advisor to the Finance Minister, Sidjae Robinson, informed JIS News that the meetings reflect the serious attention the international developments warrant and “the preparedness of the Government and monetary authorities to take appropriate action in protection of the national interest and be proactive in preventing or mitigating any negative fallout.”
The Central Bank’s mid-week intervention was a pre-emptive measure and according to a release from the bank, was “as a direct consequence of the current global financial turmoil, and to preserve overall financial stability.”
“This facility is strictly intended to provide liquidity to these institutions for overseas margin and repo payments on Government of Jamaica (GoJ) global bonds during this period of dysfunctional money markets,” the release added.
The specific objectives of the temporary lending facility are: to alleviate any short-term US dollar liquidity needs of domestic financial institutions; to ensure the stability of GoJ global bond prices; and to minimise pressure in the domestic foreign exchange market.
The BoJ release emphasised that the Central Bank would continue to closely monitor the financial system and take appropriate action.
“In support of the Special Committee’s scrutiny, analysis and weekly Cabinet briefings on the developing situation, a technical team has been established to monitor continuously… on an hourly and daily basis, developments in the local and international money markets,” Miss Robinson pointed.