BOJ introduces new forex agreement to promote US dollar liquidity
Published:Thursday | January 23, 2020 | 10:17 AM
Bank of Jamaica (BOJ) on Wednesday announced that it has introduced a new instrument in the form of a foreign exchange swap arrangement for authorised dealers.
The BOJ says the instrument is intended to enhance the bank’s management of the foreign exchange market and provides US dollar liquidity through authorised dealers via a swap arrangement.
Under the FX Swap Arrangement, the bank 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 B-FXITT operations, the bank says it will utilise the FX Swap Arrangement to smooth out excess volatility and restore orderly conditions in the market.
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