Kingston, Jamaica — The Bank of Jamaica (BOJ) has announced that it is reducing the amount that authorised dealers and cambios are required to sell to the central bank from their daily purchases of foreign exchange.

Effective today, the amount required to be sold by both authorised dealers (ADs) and cambios to the central bank is now “reduced by 5.0 percentage points,” the BOJ informed in a release yesterday.

According to the BOJ, authorised dealers and cambios currently sell 25 per cent and 20 per cent respectively of their daily foreign exchange purchases to the central bank in what is called a “surrender” arrangement under the public sector entity (PSE) facility.

“The reduction will result in the PSE facility surrender requirement falling to 20 per cent and 15 per cent for ADs and cambios,” the bank added.

Authorised dealers and cambios also are required to sell five per cent of their daily foreign exchange purchases to Bank of Jamaica in what is called the regular surrender requirement. This regular surrender requirement will remain unchanged.

“The reduction in surrender requirements, in conjunction with the BOJ Foreign Exchange Intervention & Trading Tool (B-FXITT), is in keeping with Bank of Jamaica’s ongoing reform to make its interaction with the foreign exchange market more transparent, market-based and to improve the efficiency and transparency of the FX market.”

BOJ added that the central bank expects a reduction in surrender requirements to improve liquidity conditions in the FX market and contribute to its deepening.

The BOJ said moving forward, the central bank will conduct periodic reviews of market conditions and other factors to determine the scope for further reductions in the surrender requirements, concurrently with further enhancements to B-FXITT.