The Bank of Jamaica has relaxed some of the restrictions on access to foreign exchange.
BOJ amends moratorium for FX dealers

THE Bank of Jamaica (BOJ) has relaxed the rules under which firms seeking foreign exchange can access it, giving some breathing room to securities dealers and other licensed firms seeking to deal in FX instruments.

The BOJ, through the Financial Services Commission (FSC), had put a six-month moratorium on the issuance of FX instruments on February 22. The only levy given to firms was for the refinancing of debt with those seeking above the US$15-million limit needing approval by the BOJ. This move came as the BOJ increased its policy rate to four per cent amid rising inflation.

After input provided by various securities dealers and other stakeholders, the BOJ will allow dealers to issue FX instruments. However, the dealer will be required to include in the application how the distribution strategy would not create FX demand from the FX market, list all the intended sources of capital across the various client buckets and verification of the sources for the subscription once the offer is closed. The existing administrative limit will remain in place.

While the move appears to be a win for dealers and their clients, the BOJ reserves the right to review the arrangement and revert to the moratorium on the issuance of FX instruments if its objectives are not met. The dealers will also have to follow the statutory limits surrounding the acquisition of FX assets less they face prosecution for breaches.

The Jamaica Securities Dealers Association had spoken against the initial move due to the disadvantaged position they'd be in relative to the banking sector which could do USD loans and impact the ability of USD borrowers to have financing options. It had posited that the move would result in high net worth individuals moving capital overseas due to the absence of quality local assets and that additional pressures would arise once the FX borrowers would have to convert JMD to USD rather than tap into the existing FX liquidity in the market.

Listed companies such as Sagicor Group Jamaica Limited and Sygnus Credit Investments Limited had explained that they wouldn't be significantly impacted by the FX moratorium with the former having no plans for USD debt this year while SCI raised most of its debt in JMD.

“I think so because we would like to access some more funding from the market for our stash. We like to have a stash in case of opportunities coming up at great prices. So, that's something that we're recalibrating. The good thing is that Proven is well established in a number of markets. Because we have the bank in St Lucia (Boslil) and the bank now in Cayman (Fidelity), we have Barbados with Roberts, we do have some flexibility on where we can raise funding from,” stated president and CEO of Proven Management Limited at a recent Proven Investments Limited investor briefing.

The BOJ has not intervened in the FX market through its BOJ Foreign Exchange Intervention & Trading Tool (B-FXITT) since February 17 with the JMD appreciating by one per cent to $154.79 as of Monday.

BY DAVID ROSE Observer business writer

Now you can read the Jamaica Observer ePaper anytime, anywhere. The Jamaica Observer ePaper is available to you at home or at work, and is the same edition as the printed copy available at


  1. We welcome reader comments on the top stories of the day. Some comments may be republished on the website or in the newspaper; email addresses will not be published.
  2. Please understand that comments are moderated and it is not always possible to publish all that have been submitted. We will, however, try to publish comments that are representative of all received.
  3. We ask that comments are civil and free of libellous or hateful material. Also please stick to the topic under discussion.
  4. Please do not write in block capitals since this makes your comment hard to read.
  5. Please don't use the comments to advertise. However, our advertising department can be more than accommodating if emailed:
  6. If readers wish to report offensive comments, suggest a correction or share a story then please email:
  7. Lastly, read our Terms and Conditions and Privacy Policy

Which long-term investment option is more attractive to you at the moment?