BOJ seeks to restore orderly conditions in Fx market

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BOJ seeks to restore orderly conditions in Fx market

Thursday, January 23, 2020

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KINGSTON, Jamaica— The Bank of Jamaica (BoJ) says it will be introducing a new instrument to foreign exchange authorised dealers to help restore orderly conditions in the market.

According to the BoJ, the FX swap arrangement is intended to enhance its management of the foreign exchange market and provide US dollar liquidity to the market through authorised dealers via a swap arrangement.

Under the FX swap arrangement, the BoJ said it will sell US dollars to authorised dealers within a pre-determined limit, at the prevailing market rate, with an agreement to buy back the same amount of US dollars at a time in the future at an agreed forward rate.

In addition to its usual foreign exchange intervention and trading tool operations, the BoJ said it will utilise the FX swap arrangement to smooth out excess volatility and restore orderly conditions in the market.

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