BoJ ends US-dollar instrument
EXCESSIVE demand for a US dollar instrument issued this week by the Bank of Jamaica (BOJ) led to its early closure on the same day of its release.
The BOJ indicated that the instrument could have an impact on the demand for foreign exchange, but declined to state the amount raised.
“To the extent that investors choose to convert US dollars to acquire Jamaican dollars to purchase the instrument, then there may be an impact on the demand for US dollars,” stated the BOJ in a mailed response to queries.
The US-denominated instrument will make payments for subscriptions as well as maturity and coupon in Jamaican dollars at the prevailing exchange rates.
The BOJ opened its FR US-Dollar Indexed Note 2016 on Tuesday, closing the same day rather than its original intended date of Friday February 6.
“The offer of this instrument was for an unlimited amount. However, due to the overwhelming demand on the first day of the offer for this instrument, the Bank is exercising its right to close the offer before the scheduled closure date,” stated the BOJ in a notice.
The notes will offer 3.24 per cent interest per annum.
The instrument replaces a FR US- Dollar Indexed Note which matured on Wednesday, 4 February 2015.
The Jamaican dollar lost about $1 of its value since the start of 2015 against its US counterpart from $114.68 to $115.77.
